Your firm’s group insurance isn’t enough

Happy that the new company you joined is giving you a medical cover? While there are many advantages to a group health cover policy offered by your employer, this policy may not suffice for the medical needs of you and your family on its own.

Low premium costs, no waiting period for pre-existing illnesses, no medical check-ups and coverage to senior citizens in your family are key benefits of a group policy. But the sum assured is not high in group insurance policies. Also, your subsequent employer may not provide cover, so you could be left stranded. You also need to consider your medical needs once you are nearing retirement.

In most cases, the level of coverage under the group insurance policy offered by companies is based on hierarchy or the grade/level at which you work. So as you climb the organisational ladder, the coverage is likely to go up.

But premiums are low in relation to the sum assured when you compare it with policies taken individually.

For example, companies such as United India Insurance and Oriental Insurance offer mediclaim policies with a sum assured of ₹5 lakh for an annual premium of just ₹3,500-3,600. An equivalent regular cover taken outside would cost you at least ₹6,000-8,000. So there is a clear saving here.

Group policies offered by companies these days also cover your parents or in-laws, even if they are senior citizens, and that too, without a medical check-up. Of course, in case your parents or in-laws are senior citizens, there will be a rise in premium outgo, but it is still cheap enough.

The other advantage is there is no waiting period. So if you or the elder who is covered by the group mediclaim policy were to fall ill at any time after paying the premium, you would be covered, including for any pre-existing medical condition.

As with a regular medical policy, claims can be settled in a cashless manner, provided treatment is undergone in a network hospital.

While you benefit from an employer-sponsored group mediclaim and must take it up when offered, you must be aware of the shortcomings too. In most cases, the cover is low. Generally, ₹2-7.5 lakh is the extent of coverage, based on your pay grade.

If you are at the lower end of the hierarchy or have many dependents, the coverage may not be enough. A regular medical policy these days is available even for ₹50 lakh!

The other important point to consider is that if you shift companies, you will not be able to port the group policy. What’s more, your new employer may not offer a mediclaim policy at all. If you are nearing retirement, you also need to consider your medical needs later on.

Clearly, the ideal strategy would be to also take a regular medical policy, preferably with a family floater option based on family health history and risk perception to your health. You must also take a top-up later on, as medical inflation is higher than the regular CPI rate.

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