Coverage
Health insurance is a critical aspect of financial planning, providing a safety net against rising medical costs. Many people rely solely on the health insurance provided by their employers, believing it to be sufficient. However, while employer-provided health insurance offers a certain level of protection, it may not cover all your needs. This is why securing personal health insurance is essential. In this article, we will explore the differences between employer and individual health insurance and why you should consider getting personal coverage.
What is employer-provided health insurance?
Employer-provided health insurance is a policy that your employer purchases for employees as part of their benefits package. The premium is usually paid, in whole or part, by the employer. This type of insurance typically covers the employee and may extend to their immediate family, depending on the employer's policy.
The primary benefits of employer-provided health insurance include low or no premiums for employees, coverage for dependents, and tax advantages for the employer. Due to these perks, many employees overlook the need for an additional personal health insurance policy. However, employer health insurance has several limitations that could leave you vulnerable in times of need.
Limitations of employer health insurance
1. Lack of portability: One of the most significant drawbacks of employer-provided health insurance is that it is tied to your job. If you switch jobs, your health insurance benefits cease.
2. Limited coverage: Employer insurance plans often come with limited coverage. The sum insured may not be sufficient to cover severe illnesses or multiple hospitalisations.
3. Insufficient coverage for dependents: While some employer policies offer coverage for dependents, it is often not enough. Additional premiums may be required to include family members, and the level of coverage may not be comprehensive, leaving potential gaps in your family's health protection.
4. No customisation: Employer health insurance is generally standardised, offering limited options for customising the policy to suit your personal health needs. For instance, if you need maternity coverage, critical illness cover, or day-care procedures, your employer's plan might not include these benefits.
5. Risk of changes: The terms and coverage of employer-provided health insurance can change at the employer's discretion. Employers may reduce the coverage, change the insurer, or even eliminate the health insurance benefit altogether due to financial constraints or other reasons.
What is individual health insurance?
Individual health insurance is a policy purchased directly by an individual or a family. These policies offer more flexibility and comprehensive coverage compared to employer-provided health insurance. They are designed to cover the policyholder's specific healthcare needs, including hospitalisation, surgeries, critical illnesses, and maternity benefits.
You can choose the type of individual health insurance that best suits your needs. For example, family floater plans, critical illness cover, and top-up plans provide different levels of protection. Individual policies also offer the advantage of customisation, allowing you to select add-ons and riders that fit your personal health requirements.
Why you should consider personal health insurance
1. Comprehensive coverage: Individual health insurance provides extensive coverage that can be tailored to your needs. You can choose a higher sum insured and opt for add-ons that enhance the policy, ensuring you are adequately protected.
2. Portability: Unlike employer health insurance, personal health insurance is not tied to your job. This means you remain covered even if you change jobs, lose employment, or retire. The portability of personal health insurance ensures continuous protection for you and your family.
3. Higher sum insured: Individual policies often allow you to choose a sum insured that matches your health needs. This level of flexibility is especially beneficial in times of medical emergencies when the costs can be substantial.
4. Customisation: With personal health insurance, you can select riders and add-ons, such as critical illness cover, maternity benefits, and daily hospital cash benefits, to enhance your policy. This flexibility ensures that your coverage meets your specific requirements.
5. Lifelong renewability: Most individual health insurance policies offer lifelong renewability, which is not the case with employer health insurance. This feature is particularly important as you get older and are more likely to require medical care.
6. Protection against medical inflation: Medical expenses are rising, and employer-provided insurance may not keep up with these costs. Personal health insurance policies help protect you from medical inflation by offering higher coverage and additional benefits.
7. Tax benefits: Premiums paid for personal health insurance policies qualify for tax deductions under Section 80D of the Income Tax Act. This allows you to save on taxes while ensuring comprehensive health coverage.
While employer-provided health insurance can be a valuable benefit, it should not be your only source of health coverage. Individual health insurance offers comprehensive coverage, flexibility, and continuity that employer insurance cannot match. It provides security against unexpected medical expenses, offers customisation options, and protects you from the rising costs of healthcare. getting a personal health insurance is a crucial step in safeguarding your financial future and ensuring that you and your family receive the best possible care, regardless of your employment situation.
Disclaimer: T&C Apply - Bajaj Finance Limited (‘BFL’) is a registered corporate agent of third-party insurance products of Bajaj Allianz Life Insurance Company Limited, HDFC Life Insurance Company Limited, Future Generali Life Insurance Company Limited, Bajaj Allianz General Insurance Company Limited, SBI General Insurance Company Limited, ACKO General Insurance Limited, ICICI Lombard General Insurance Company Limited, HDFC ERGO General Insurance Company Limited, Tata AIG General Insurance Company Limited, The New India Assurance Company Limited, Cholamandalam MS General Insurance Company Limited, Niva Bupa Health Insurance Company Limited , Aditya Birla Health Insurance Company Limited, Manipal Cigna Health Insurance Company Limited and Care Health Insurance Company Limited under the IRDAI composite CA registration number CA0101. Please note that, BFL does not underwrite the risk or act as an insurer. Your purchase of an insurance product is purely on a voluntary basis after your exercise of an independent due diligence on the suitability, viability of any insurance product. Any decision to purchase insurance product is solely at your own risk and responsibility and BFL shall not be liable for any loss or damage that any person may suffer, whether directly or indirectly. Please refer insurer's website for Policy Wordings. For more details on risk factors, terms and conditions and exclusions please read the product sales brochure carefully before concluding a sale. URN No. BFL/Advt./23-24/414
