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Look beyond group health insurance for foolproof protection

You can consider a top-up cover if the standalone policy is beyond budget

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Many employees count the group insurance covers offered by their organisations amongst the chief benefits of their employment contract.

Most group health insurance policies cover pre-existing illness unlike independent health plans do not cover such conditions during the initial couple of years’ period. Moreover, group policies also tend to extend parental coverage, again a boon for employees as it is difficult to buy fresh covers for those in the older age groups.

Benefits of group covers notwithstanding, you can consider yourself truly insulated against burgeoning medical expenses only if you add a standalone individual health cover to your protection basket. It can bridge several gaps left unaddressed by corporate covers. Further, a standalone cover can also act as a cushion during episodes of job transition or loss when you could be without any health cover. It will help you avoid the hassles of looking for a policy at an age when insurers are reluctant to extend a cover.

While it is best to have an independent health insurance policy in your protection portfolio, you can consider buying a top-up cover if the standalone policy is beyond your budget. Top-up plans are substantially cheaper than independent policies due to their structure – they get triggered only after the pre-specified deductible amount is exhausted. In other words, you have to bank on either your savings or your base insurance cover to meet the expenses before the top-up plan shoulders the rest of the claim burden. For example, say your corporate policy offers a cover of Rs 3 lakh, but you have run up a hospitalization bill of Rs 4 lakh. Ordinarily, you would have no choice but to clear the bills using your savings.

However, if you have a top-up plan in place, it will kick in once the Rs 3-lakh limit is breached and take care of the amount that your group policy cannot pay for. In effect, a top-up plan provides a large sum insured at a minimal cost. Within the add-on category, you would do well to buy a super top-up plan instead of a regular top-up policy. For e.g., a simple top-up gets activated only if a single claim exceeds the deductible limit. A super top-up, on the other hand, takes the aggregate of claims filed during the year into account to determine the point of trigger.

A corporate health cover can indeed be a huge source of comfort, but ensure that you make independent arrangements for the rainy day which will help you safeguard your family against the deadly impact of soaring medical costs.

EXPLORE YOUR OPTIONS

  • You can consider a top-up cover if the standalone policy is beyond budget
     
  • Depending on the investor’s risk appetite and objective, choose a mutual fund scheme wisely

The writer is CEO, Aditya Birla Health Insurance

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