Why is Banking on Group Health Covers Not Advisable?


The health insurance market is flooded with a variety of different insurance plans. Different plans offer a varied range of covers. While it may bewilder you as to selecting the right plan, it often leads to procrastination when a group plan is provided by your employer.

One may feel that group insurance is enough as it has a broad coverage of ailments at a nominal premium which is taken care of by their employers. But this is not entirely true in a medical insurance policy covering a group of employees.

Let us look at the reasons why one must not entirely rely on group policies –

The policy coverage is not in your control.

The sum assured in your group policy is at the discretion of your employer. This amount may be sufficient for some whereas inadequate for others. For example, ₹5 lakh of sum insured may be sufficient for a young and healthy individual. This same amount, when considered for a family of four, is not enough. Moreover, the amount of coverage cannot be changed to meet medical inflation. Also, when you switch employment, the cover may not remain the same across all your employers. At such times, relying on a group policy may not be advisable.

Group policies remain in force until you are associated with the group.

Your group cover remains in force only till you are working with your employer. If you switch jobs or you decide to walk down the entrepreneurial path, there is no insurance cover for you or your family. Also, when you are changing jobs and you need medical assistance, you are without an insurance policy. This can severely deplete your savings in the event of an unfortunate incident during such an interim period.

Buying insurance after retirement is expensive.

After your retirement when you decide to buy a health cover, these policies may not be cheap. Your age is instrumental in determining the premium for your policy. Moreover, an ageing body develops ailments, and such pre-existing health conditions may significantly shoot up your premiums. So availing a family health insurance right from the start can be a suitable alternative. It will not protect not only you, but also your family after retirement.

It is an additional cost for your employer.

Since a group insurance policy is an additional benefit provided to the employees, it is a cost for your employer. During times of stringent financial conditions, your employer may choose to discontinue the policy, and you will be left without any insurance cover.

Capping and restrictions.

While a group plan may offer coverage for a variety of treatments, there are certain sub-limits in such plans. If one is not aware of these sub-limits or specific conditions, it may burn a hole in your pocket at the time of availing your treatment. These conditions can be in the form of room-rent capping or on the amount covered by the insurer for each treatment type.

Thus it is imperative that you do not rely entirely on a group insurance policy. Adding a group policy with either a family health insurance or critical illness insurance will ensure a comprehensive cover. After all, insurance planning is almost synonymous to financial planning in today’s world.

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