Relying only on corporate health plan can impact your finances

Supplement it with a retail plan which has adequate sum insured and no room rent or diseases-wise capping

A recent study of over 2,000 corporate health insurance policies by Policy Bazaar found that they come with a number of limitations. While an employer-provided cover can serve as a valuable first line of defence, employees should not rely on it alone.

Key deficiencies Room rent capping: The Policy Bazaar study found that 12 percent policies impose a room rent cap equivalent to 1 percent of sum insured, while another 48 percent limit the room rent at Rs 5,000/- per night.

If a corporate policy offers a sum insured of Rs 3 lakh and imposes a room rent cap of 1 percent, the maximum room rent allowed would be only Rs 3,000/-per night, insufficient for securing a single, air-conditioned room in a top-tier hospital in a metro. Imagine that a person’s corporate cover allows him maximum room rent of Rs 5,000/-per night, but she opts for a room that costs Rs 10,000/- “The room rent cap is 50 percent of the actual rent in this case. The fallacy most people commit is to think they will only have to pay the balance Rs 5,000/- out of their own pocket. In reality, the insurer will apply proportionate deduction and pay only 50 percent of the overall bill.”

Limited sum insured: The study found that 26 percent of policies offer a sum insured of only Rs 1-2 lakh, while another 48 percent provide coverage worth Rs 3-4 lakh. Corporate do so to curtail their premium cost. However, a sum insured of up to Rs 4lakh can prove inadequate in case of a serious ailments.

Co-payment: Many policies come with a 10-20 percent co-payment requirement. This means the customer has to pay 10 (or 20, as the case may be) percent of the bill out of his pocket, with the insurers paying the balance 90 percent.

Sub-limit for cataract: 72 Percent of corporate covers come with a sub-limit of Rs 25,000/-for cataract while another 22 percent cover it up to Rs 15,000. With the rise of less-invasive procedures, however, treatment costs can go up to Rs 1.5-2 lakh.

Robotic surgery: It ensures greater precision in surgical procedures, but 67 percent of corporate plans cover them up to 50 percent of sum insured.

Reduced members covered: Corporate policies are reducing the breadth of coverage.”Most only cover the employee and his immediate dependants, like spouse and children. Older dependants like parents and in laws-are not covered as doing so drives up the premium.

Transient cover: Corporate health insurance is contingent on one’s employment with a company. Job changes (to a company that doesn’t offer this cover), layoffs, or starting one’s own venture can result in loss of coverage.

Benefits of PED coverage

Corporate plans do have their merits. The employee doesn’t bear the premium cost. “Corporate plans cover pre-existing diseases (PEDs) from day one, without a waiting period.”

Notwithstanding the limited sum insured, these policies can take care of shorter-duration hospitalisation for non-serious ailments.

Don’t delay purchase of retail policy

Postponing the purchase of a retail policy until retirement, as many do, can prove risky.“At 58-60, you may have a few chronic ailments due to which insurers may not offer you a policy.”  Even if they do, the policy may have a limited sum insured, or come with a waiting period for PEDs.

The retail policy must have adequate sum insured so that it is able to cope with India’s 12-15 percent healthcare inflation. “Buy as much sum insured as your pocket allows. Health insurance premium don’t increase proportionately with the sum insured,” Kasliwal suggests purchasing a minimum base cover of Rs 10 lakh and supplementing it with a super top-up.

Retail plan: Must have features

Avoid policies with room rent capping or disease-wise sub limits. “Families with young children should have a policy with an OPD cover. HNIs, who may want to go abroad to get a serious ailments treated, may opt for a policy that offers global coverage,” Kasliwal suggests choosing a policy whose cashless network includes hospitals in your vicinity.

For More Details: Pooja Manoj Gupta, visit www.giia26.com
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