Sandeep Fernandez, an employee of an IT company, commanded a pay package that was not only at par with the best in the industry, but also included a company-sponsored group health insurance for employees. He never bothered to acquaint himself with the terms of the policy, as he felt that he was covered against any eventuality.
All was well, until one day when he and his wife met with an accident. He lost his right eye and his wife was hospitalized. He was forced to stay away from his job for a year. During this one year, he realized that the group health insurance cover provided by his company was inadequate, and came with several caveats, for example, a high co-pay percentage and treatment wise limit.
Sandeep bore a considerable amount of the expenses incurred. He could have avoided the financial loss if he would have taken a personal insurance cover for himself and his family.
Listed below are some benefits of Personal Health Insurance over Group Insurance:
Complete Control
You can exercise complete control while deciding the sum insured. You can independently select the nature of the policy. Apart from this, you also have the flexibility to increase or decrease the cover depending on your need.
|
Feature
|
Scenario 1
Group Health Insurance
|
Personal Health Insurance
|
|
Coverage amount
|
Depends on company policy
|
Depends on your requirement
|
|
Flexibility w.r.t. coverage amount
|
No
|
Yes
|
|
Coverage for dependents
|
Sometimes
|
Available
|
|
Income tax benefits
|
No
|
Yes
|
|
Complex documentation and approvals
|
Yes
|
No
|
| Availability of add-ons |
No |
Yes |
|
No claim bonus
|
No
|
Yes
|
Family Cover
The personal health cover can insure not only you but also your dependents and parents.
Job Change
The transition period between jobs or change of location is marked as a high-risk time, as you might not be eligible for cover under the group insurance plan. It is imperative therefore that your personal insurance cover gives you protection irrespective of your job or location.
Retired Employees
A health insurance is most valuable post the retirement age of 60 years. Most company-provided group insurance covers expire as an employee retires. To avoid this you can avail a personal health insurance plan at a younger age, and opt for lifelong renewability option.
Required Cover and Cover Opted For
You need to assess the amount of health insurance required for your family and yourself on a regular basis. The cost of medical expenditure rises exponentially year on year. A group health insurance does not take into consideration such a high rate of rise. A personal health insurance reassessed regularly can help you to bridge the gap between the required cover and the existing cover.
Add-ons
You have the freedom of moulding your policy as per your requirements. You can purchase specific provisions, in short avail riders or add-ons.
No Claim Bonus
You can avail the benefit of no claim bonus offered by Insurance Companies to their customers.
Deduction under Section 80D
While filing your return to the Income Tax Department, you can claim a deduction for the premium paid, under section 80D. This deduction cannot be claimed in case your company pays for your health cover under group insurance.
Hospitalization
Needless to say, as an investor, it is imperative you understand the fine print before opting for an insurance plan. The above-mentioned pointers may not hold true if your company provides you with an insured sum that is more than what you could afford to pay for individually.
To know more about the Personal Health Insurance Plans offered by ICICI Lombard click here.
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