You may have a group health insurance plan offered by your employer. However, that cover may not be enough or ideal for you and your family. In such a case, you need to opt for another coverage or enhance the same.
The terms and conditions of your group insurance health plan are not well understood most of the time. It is also quite common that you are not aware of the extent of coverage concerning group insurance policies. While the group insurance scheme is great, it may not be enough. Here’s how you can evaluate the need for an additional personal health insurance policy.
Coverage of group insurance policy:
Assessment and evaluation of the coverage of the group insurance policy is an important step. The extent of coverage should be sufficient to match the medical expenses of today’s times. The medical cost escalation is higher than the average inflation, hence you need to ensure that the group insurance policy coverage matches the requirement.
Rule #1: Check if your Group Health Plan provides you with adequate coverage. If not, opt for a base plan along with a super top-up plan to enhance your coverage. However, if there is a budget constraint, you can opt for a super top-up plan with your group insurance coverage as your deductible.
Capped limits:
Most Group Health Plans have a sub-limit or a capping on the coverage. For example such room rent or a compulsory co-pay, which is not desirable.
For example, if you have a 1% room rent cap for a group insurance coverage of Rs 5 lakhs, then you would be eligible to opt for a hospital room of a maximum of Rs 5000. If the hospital room rent is higher, then an additional amount, along with pro-rated expenses of other room-related associated expenses would also need not be covered by insurance. It needs to be paid out of pocket!
Similar is the case with co-pay. If there is a compulsory co-pay of 10-20%, (usually in the case of senior citizen parents), you would have to bear the same irrespective of the total claim amount!
Rule #2: Check the fine prints of your Group Health Policy for capped limits and co-pay. If there is a capping or a compulsory co-pay, you most definitely need to opt for a personal health insurance plan preferably without any limits and boundaries.
Alignment to your needs:
While company group insurance health plans are a great means of hedging your health risk, they may not align with your exact needs. There is a complete lack of control over the itemised coverage from the employee’s perspective.
Thus, it is an integral part of financial planning that you avail a comprehensive hedge against the health conditions of yourself and your family members. This will ensure that you do not have to dip into your long term investments to clear your medical bills.
Rule #3: Does your Group Health Plan provides you with coverage for the special ailments that you need for yourself and your families? If not, with optional add-ons which can enhance the coverage, a separate personal health insurance plan can be customised.
Critical ailments coverage:
Group insurance plans are usually only indemnity plans and hence it would get triggered only if you are hospitalised. However, in case of diagnosis of any critical or terminal ailments, there is no additional payment done if there is no need for hospitalisation. This is where Critical Illness Plans come into play. In the current environment, especially in the post-covid world, the instance of lifestyle diseases and critical illnesses is quite high. Hence, having coverage for these items may be important. According to the Health of the Nation 2022 report, published by the Apollo Hospitals, 7% of the Indian population records Diabetes, 8% records hypertension and about 2% records COPD (i.e. Chronic Obstructive Lung Disease) along with Asthma.
Solution:
Standalone critical illness plans pay the entire sum insured on the diagnosis of any of the listed critical illnesses and can be taken along with your existing indemnity health insurance plan. It complements a regular comprehensive health plan and is necessary for complete health insurance coverage for an individual.
Rule #4: Check if lifestyle ailments are covered under your Group Health Policy. Opt for standalone critical illness plans with a wide range of coverage.
OPD Benefits:
Further, with the pandemic, it became evident that OPD(out-patient) expenses, such as doctor consultation, diagnostic tests, etc. could also be quite significant. If such a sub-limit is too low, then it becomes important to complement your group insurance policy with a personal health insurance policy.
Rule #5: Check if your group plan offers OPD benefits. If not, you can opt for a personal health plan with OPD benefits.
Additional benefits of personal health plans over and above group plans:
Optimal tax benefit:
If the premium of group insurance schemes for employees is paid by the employer, the employee cannot enjoy the tax benefit under section 80D. By availing of a personal health insurance cover, you can not only hedge your health risks completely but also avail tax benefits on the premiums paid.
Under section 80D, you can claim up to Rs. 25,000 towards premium paid for yourself, dependent spouse and children. In addition, you can claim premiums paid towards medical cover availed for your parents.
| Premium paid for self, spouse and children | Premium paid for dependent parents | Total tax benefit U/S 80D | |
| Self, spouse and dependent children < 60 years of age | Rs 25,000 | 0 | Rs 25,000 |
| Self, spouse and dependent children < 60 years of age + dependent parents < 60 years of age | Rs 25,000 | Rs 25,000 | Rs 50,000 |
| Self, spouse and dependent children < 60 years of age + dependent parents > 60 years of age | Rs 25,000 | Rs 50,000 | Rs 75,000 |
| Self and/or spouse > 60 years of age + dependent parents > 60 years of age | Rs 50,000 | Rs 50,000 | Rs 1,00,000 |
Tip: A maximum amount of Rs 1 lakh can be availed as a tax exemption under section 80D.
Lifelong renewability:
Personal health plans come with the benefit of lifelong renewability. Most group plan coverage ends as soon as you retire, leaving the most vulnerable part of your life. That is what we call post-retirement, without any health insurance coverage! For such scenarios avail a personal health plan.
Tip: Avail of adequate health insurance coverage as soon as you can so that you can continue it forever.
If you have already not evaluated your requirement for a personal health insurance policy, it is time to evaluate your requirement. Avail the best individual health insurance policy to ensure complete coverage. This will in turn help you enjoy a stress-free life!
To know more about personal plans visit https://blog.oneassure.in/