Insurance conundrum: Is taking employer coverage a better deal?

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Having an adequate amount of health insurance is much-needed at a time when we are living under Covid-19 fears. The salaried employees have a benefit of employer insurance, but the coverage may not be enough. Some employers charge extra premium to offer higher coverage. However, employer insurance has its downside. A balance between employer and private insurance is how one should cover oneself and the family. We approached Shailesh Kumar, Insurance Head & Co-Founder, Insurance Samadhan, to address the following query:

I work with a Noida-based IT company. I had an employer insurance coverage of Rs 5 lakh. This year, I paid extra premium for a coverage of Rs 10 lakh that covers me, my wife and my daughter. I paid Rs 12,000 to the employer for this. I happened to speak to an insurance agent who has advised me to buy a family floater health insurance from a private insurer and discontinue the additional premium that I will have been paying to the employer. What should I do? What difference does it make if I have an insurance from my employer versus from a private insurance company? – Shishir Goyal

Response by Shailesh Kumar:

You have an employer group cover which always has an edge over individual cover. Benefits are detailed below:

— Group cover is always economical and offer savings ranging from 30-70 per cent depending on the size of the group

— Terms  and conditions as well as benefits can be discussed and designed as per the group profile.

— If group is large then the insurance company offers additional cover for self, family and parents on extra payment as made by you.

— Group cover claim processing can be done on priority because the insurance company does not want to lose a group business.

Benefits of group insurance is mutual because the insurer gets a large number of clients in a single contract called Master Policy. Insurance company does not offer individual contract thus saving on business sourcing, individual underwriting and documentation.

For individuals, it is beneficial from all perspectives except one major flaw as given below:

You avail benefits till you are member of the group. The day you leave the group your insurance  cover terminates . There are examples when employees leave or asked to leave on health grounds. In such cases, employees not only lose job but also cover and no insurance company will be willing to give them a cover.

We advise all to have a supplementary personal health cover which is owned by you. In the given query, the person should buy a personal family floater cover of Rs 5 lakh along with Rs 10 lakh group cover that he already has.