InvestorQ : I have been reading about health insurance recently. I don’t need health insurance given that my company already has one for me, correct?
divya Sing made post

I have been reading about health insurance recently. I don’t need health insurance given that my company already has one for me, correct?

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Swapnil Sarang answered.
3 years ago
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No. While you may not “need” an additional health insurance, it might be the right decision in the long-term to purchase one for the long term.
Let’s try and understand both health insurances better to know why.
Group health insurance
Group health insurance is typically offered to the employees of a company as part of their salary package. It is a voluntary feature a company extends to its employees and if one doesn’t want the insurance, he/she can convey the same to his/her HR Team.
The members of a group insurance policy are offered certain fixed and uniform covers.
For this kind of insurance, the premium amount tends to be lower as the cumulative health risk of all members is taken into account while calculating the premium cost. As not all employees of a company are likely to fall sick at the same time, the risk factors are taken care of.
As the insurance is given to a company’s employees, once an employee leaves the company, he will no longer enjoy the benefits of group insurance from that company.
Individual health insurance
Individual health insurance, as the name indicates, is designed to cater to the needs and requirements of an individual. Various factors such as the number of family members, medical history, age, income and other factors are taken into account while calculating the premium amount.
The premium amount while taking an individual health insurance is significantly higher vis-à-vis group health insurance and is fixed at the time of buying the insurance. An individual can choose the frequency of the premium payment - monthly, quarterly or yearly - and he/she can choose the tenure of the health insurance policy.
As can be seen from the explanation above, there are various differences between the two kinds of insurances. A few are:
- Premium amount/cost: The premium amount of an individual insurance policy is any day higher than that of a group insurance policy.
- Flexibility: While individual insurance lets you choose the terms of the policy as per your requirements, group insurance will only cover you for basic medical emergencies as pre-determined and agreed up on by the company. As a policyholder, you do not enjoy the freedom to customize your health insurance policy as per your needs under a group insurance cover.
- No claim bonus: In a group insurance policy, if you do not make any claim in a year, you do not get any benefit. However in individual policies, in case you haven’t made any claims throughout the policy tenure, you can enjoy a no-claim bonus, which is a reward the insurance company gives the policy holder for being healthy.
- Convenience: There are certain scenarios when an individual may find himself/herself not eligible for a health insurance policy because of medical or financial history issues. This, however, is never the case with group insurance, as every employee of the company is automatically granted approval for the insurance package offered by the company.
- Retirement concerns: If you are only covered under group insurance, and never take an individual health insurance, then you won’t enjoy any coverage post retirement. Getting an individual cover post retirement is not easy and comes at a much higher cost. However, this issue can be avoided if you have an individual insurance policy.
Thus, it is always advisable to have an individual health insurance policy even though you are covered under a group insurance policy. This means even if the premium amount pinches your wallet today, it will be the smart decision from a long-term point of view.
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