There are several options - individual, family floaters and top-up policies - but check the cost involved
Employed individuals are default beneficiaries of group insurance policies bought by a company on behalf of the employees. While these are convenient for individuals who want to avoid the hassle of buying an insurance cover themselves, these may not be enough to solely depend on for medical emergencies. In fact, these may often play spoilsport in your planning.
Ravi Shetty realised this the hard way. He needed to be hospitalised in the interim period of 15 days when he had quit one job for another. So, although he was adequately covered by both his old and new employers’ group insurance policies, he had access to neither when he needed it the most.
Companies strike better deals with insurance firms, and so, you can get many more benefits than what you get in the open market. For instance, you can get claims for a number of pre-existing diseases, and also covers for newborn babies starting from their day of birth. Employees may also get up to 20 per cent discount on the premium amount.
But these benefits last till you are with the company. There may also be variations in the policies offered. “Some companies offer employees a personal accident cover only while they are on official duty, while others may offer it round-the-clock. Many others offer cover based on an employee’s position in the hierarchy,” says Gaurav Garg, managing director and CEO, Tata AIG General Insurance.
While most financial planners think a Rs 5 lakh medical policy is a good enough cover for an individual, they prefer erring on the side of caution and advise you to buy some more cover, if the cover is a group policy. “With medical costs rising, the sum insured by an employer may fall short in case of a large claim. The personal health policy should be able to take care of that situation,” says New Delhi-based Rahul Agarwal of Optima Insurance.
Given the rise in lifestyle diseases, employees will need to take into account the nature of the group medical cover being offered before opting for an individual cover for themselves and their family.
We deconstructed three familiar situations to find out how much extra cover is needed for individuals who already have a Rs 5 lakh group medical insurance.
| POSITIONED at EXTRA COVER | ||||
| Medical Insurance | Cost | Cost of family floater | Top-up cost | |
| Single-income nuclear family | Not required unless planning to shift jobs | Rs 13,379 | Rs 7,329 for four members | |
| Double-income nuclear family | Rs 3 lakh-worth individual policies for wife and self | Rs 4,886 (age group 26-40 ) Rs 6,690 (age group 41-45) | ||
| Single-income families with parents | Individual Rs 3 lakh for parents | Rs 12,357 (age group 56- 60) Rs 15,446 (age group 61-65) | Rs 13,379 | Rs 7,329 for four members Rs 5,781 (age group up to 60) Rs 8,934 (age group above 60) |
Single-income nuclear families
Single-earning members planning a career move should opt for an additional cover of at least Rs 3 lakh, say financial planners. “Individual policies have a waiting period clause for some diseases. If you already hold a policy, you can meet any eventuality arising in the period between two jobs,” says E Kartikeyan of Ladder7 Financial Advisories.
Those planning to remain with the same organisation can opt for a family floater, which covers two adults and children. Rs 3 lakh-worth Bajaj Allianz Health Guard’s family floater will cost an annual premium of Rs 13,379, considering the senior-most member is in the 40-45 years age group.
Double-income nuclear families
Considering their affordability factor, financial planners feel such individuals could up their security quotient by buying policies of Rs 3 lakh each. Bajaj Allianz’s Health Guard individual policy will cost Rs 4,886 a year for individuals in the 26-40 years age group and Rs 6,690 for those between 41-45 years.
Single-income families with parents
Since the level of responsibility is higher on a single-earning individual, planners suggest buying a family floater of Rs 3 lakh for the wife and kids. For each parent, he/she can either go for an individual policy of Rs 3 lakh or opt for individual top-ups depending on the kind of cover the employer is offering for one’s parents.
The reason for higher individual policies for parents is that at their age, they are likely to suffer from advanced stages of illnesses.
With the policies for senior citizens having several age- and illness-related conditions, their premiums are higher and a top-up could prove cheaper. For instance, individual policies taken under Bajaj Allianz’s Silver health policy cost Rs 12,357 a year (age group of 56-60 years) and Rs 15,446 a year (age group of 61-65 years). In comparison, an Extra Care top-up from the same company costs Rs 5,781 a year (till 60 years) and Rs 8,934 a year (above 60 years).
According to Garg, any of these individuals can opt for a critical illness as either a standalone policy or a rider. Costs will increase from Rs 2,500 to more as the number of illnesses covered increases. Policyholders get a specified amount when they are diagnosed with any of these illnesses.
