Why your employer insurance is just not enough for your parents?

health insurance Oct 28, 2019

Usually professionals are casual about insurance needs because their employer is providing a health cover. Depending on employer to cover your parents is not a great idea - here's why

Before we answer that, let's look at the benefits of a employer managed health cover.

Benefits Of Employer-provided insurance

Removes procrastination: One of the biggest benefits of a employer health cover is that it is part of your employment contract. Because it is automatic, employer health cover removes 'procrastination' and 'indecision' as far as health insurance is concerned.

No restrictions on 'pre-existing' health conditions: Since companies negotiate a health cover as a 'group', insurance companies provide special benefits that you might not get in retail insurance plans. Biggest benefit of an employer cover is that it usually does not carry restrictions that you cannot get coverage for 'A' or 'B' health condition.

Covers immediate family In most cases, companies provide employees with a family cover that includes parents. Even if parents are not covered under base plan, an add-on option is available for people who want to include parents (usually comes by paying out-of-pocket for add-on).

Planned health expenses covered
Another great feature of an employer cover that it usually includes planned hospitalisation expenses. Expenses related to a pregnancy or a laser surgery are likely to be covered in a corporate plan but such surgeries come with 'waiting periods' in a retail plan.

Out-patient expenses are covered
Not all companies cover out-patient expenses but some definitely do. Again a massive benefit - clinical visits are usually not covered in retail plans but that same restriction does not apply for employer plans.

Blind-spots in a employer health insurance

It is not permanent: We can't stress this enough - health insurance planning runs for 20-30 years. The older you get and the less productive you become, the more you need assistance of health insurance. A corporate cover comes with special benefits that will only accrue as long as you are an employee. Once you leave for whatever reason, such benefits tend to lapse.  This is even more critical if you have added parents to the same health insurance plan. You need to have a independent, backup health insurance planned for your family.

You are most likely under-insured
An average 35 year old earning 20 lacs needs atleast 10 lacs sum insured for his family. Most companies offer a plan with 3-5 lacs sum insured which is simply not enough. Companies try to minimise their insurance premium and choose a plan that might not sufficient for your family needs.

Your family might not be covered
If your plan is restrictive and does not cover your parents, it makes sense to cover the gaps by choosing a retail health cover.

You can plan a supplemental cover (top-up) to protect you over and above your employer cover. A supplemental cover is cheap and helps you build a history with an insurance company.

Sushant Reddy

Sushant is a serial entrepreneur who is passionate about transforming senior heatlhcare in India