Here's why you must buy a personal health insurance cover

The pandemic has taught us an important lesson — health is our most precious asset. We need to take utmost care of our health and at the same time, have the means to get the best treatment in case of a health issue.

With medical inflation at 18-20%, healthcare related expenses can be backbreaking. Let us accept the fact that in 2021, health insurance is not a luxury anymore, but a basic need for everyone. You may not visit a multiplex or a 3- star hotel in your city but you will visit the hospital when the need arises.

Covid opened our eyes to this truth almost instantly. The nightmare of a sudden severe illness and hospitalisation, of not one but many family members together, came true unfortunately for many people.

It is essential for everyone to have adequate and comprehensive health insurance policy. Often people have a sense of security that they have a health cover provided by their employer, or a group Mediclaim cover provided by the bank or the credit card company. Why this coverage may not be enough, let us see:

Group Health Insurance cover by employer: Most employers offer a group medical cover to their employees. This give a sense of relief that there is heath coverage and we don’t need to have a separate personal health insurance in addition, why spend more? Here’s why you must have a personal cover even though you have an employee cover.

The employer covers you for a limited and fixed amount. The group policy limit will not fully cover higher outflow in case you are hospitalised with an illness that requires a larger expense.

The cover provided by the employer is voluntary and is not at all mandatory . If the company is facing rough weather then they may not renew the policy ,when it becomes due. In cases of good, successful and glamorous companies like Jet Airways and Kingfisher Airlines, where many thousand employees (over 40,000 combined) were left in the lurch without a salary for months, must have also lost their medical coverages as well.

Imagine the trauma and financial burden if someone in this situation goes through a health crisis and needs hospitalisation.

During the Covid crisis, many organisations retrenched employees. Assuming these employees were having health insurance provided by the employer – imagine what difficulties they must be facing now.

You may have a comfortable cushy job today but there are no guarantees in life. Black Swan events can impact the best of sunrise sectors and thriving industries. Some day you may decide to quit your job and take a different path to start up your own business or consultancy. At that time self-paid health cover will be morale booster for you and your family.

Health insurance offered by banks: Public sector banks offer group medical insurance to their customers through the group policy offered by them.

When government announced the merger of some PSU banks last year, the continuity of health insurance cover offered by the merged bank was affected and the decision was taken to discontinue the policy. The customers were told to buy individual retail policy from the new insurer with steep hike in premiums and conditions like 30 days cooling-off period and permanent exclusion lists, pre-existing diseases not covered . What a great let down!

Once in a while, portability from Group policy to retail policy with same insurer is possible and you can find it out by talking to your HR department.

Another point to note is that your group cover is valid only till you are maintaining your bank account with that bank. If for some reason you decide to close the account, you stand to lose the health coverage. This is a strong reason for you to have a personal insurance plan in addition to such policy.

Health cover for credit card holders: Some credit card companies offer health insurance through group Mediclaim policy in association with insurance partners. Young people often go for these plans offered as a benefit with the card. Some cards also have the option to pay the premium in instalments. The insurance cover entails standard benefits with few customised options.

One may be tempted to avail this because of ease of purchase and payment. There is a caveat here. Many a times if you are dissatisfied with the terms or services of the credit card company in future, you may want to give up the card. With this you will also lose the health cover and any pre-existing waiting period benefits. Keep it in mind that Customers are charged admin charges by card companies and these are written in fine print.

Therefore, it is pertinent for every individual, salaried or self-employed, to buy a comprehensive health insurance at a young age, when it is cheaper and easier to get a coverage.

(The writer is director and founder of RIA Insurance Brokers. Views expressed are personal)