Don't depend on health cover by your employer

Most salaried are quite happy and content with their employers' health insurance schemes.

Most feel they do not need any more insurance. But in the past three years, most Indian companies have been reducing the cover or insisting on co-payment for employees' parents.

In such circumstances, employer's cover may not be enough. So, it is important the cover keeps pace with rising costs.

Sanjay Datta, head-underwriting claims, ICICI Lombard, says the amount of mediclaim by Indian companies since 2008 has shrunk or remained constant. 

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The companies spend 90 per cent less on employee benefits and health care activities compared to West.

These started cutting on insurance premiums after 2008, when the slowdown started. Hence, 20 to 25 per cent of employees take a top-up above the mediclaim.

More companies are cutting costs and introducing restrictions on covers. An ICICI Lombard report says 76 per cent of companies are adopting co-pay and room-rent limits. The average cover by employers is Rs 1-1.5 lakh.

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"Unfortunately, if you happen to be admitted for more than a week due to a serious ailment, your hospital bill is bound to shoot up and chances are low that your employee scheme will be able to take the burden. Hence, it's important you have a standalone health cover equivalent to your annual income. Also, a critical illness plan and a basic personal accident policy should be bought," says Yashish Dahiya, CEO of Policybazaar.

Since medical cover by employers is insufficient, it makes sense to have an individual health policy. It can be handy if the employer-provided group insurance limit gets exhausted or when you are in the midst of switching jobs. 

One should check the waiting period for pre-existing diseases (PEDs), maternity benefits and the hospitals under the cashless facility.

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Employee-provided insurance covers only hospitalisation. Over and above your employee scheme, to buy a health cover of Rs 5 lakh and critical illness and personal accident policy of Rs 10 lakh each, a 30-year-old male will have to spend roughly Rs 9,000 annually.

Religare Care health cover costs Rs 5,162 (sum assured, or SA= Rs 5 lakh). Bajaj Allianz sells critical illness cover at Rs 3,000 (SA= Rs 10 lakh), whereas ICICI Lombard's personal accident policy is for Rs 1,221 (SA= Rs 10 lakh).

However, insurance by companies is useful under certain conditions. "It (employer-provided group insurance) covers PED and maternity from the day policy is issued. Whereas, standalone health policies will have a waiting period of at least two to four years, depending on the insurer," says Mahavir Chopra of Medimanage.

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One can look at a top-up plan to raise cover. Some companies offer group top-ups, rare but useful.

These can be bought by the same insurer who has offered you the employee scheme. Divya Gandhi, head - general insurance and principal officer of Emkay Insurance Brokers, says, "Here the employee should check if the group top-up is in line with the employer-provided scheme. Whereas, individual top-ups are a bit expensive and one should check for base conditions before opting."

Some insurers insist the top-up will not be issued unless the person has a Rs X amount of health cover or some insurers put a condition that the top-up will not come into play unless the insured exhausts his base policy sum assured at one go.

Hence, make sure you buy an individual health cover when young so you get a policy at better premiums covering more illnesses.