COMPANIES STRIKE BETTER DEALS WITH INSURANCE

Employed individuals are default beneficiaries of group insurance policies bought by a company on behalf of the employees. While these are convenient for individuals who want to avoid the hassle of buying an insurance cover themselves, these may not be enough to solely depend on for medical emergencies. In fact, these may often play spoilsport in your planning.

Ravi Shetty realised this the hard way. He needed to be hospitalised in the interim period of 15 days when he had quit one job for another. So, although he was adequately covered by both his old and new employers' group insurance policies, he had access to neither when he needed it the most.

Companies strike better deals with insurance firms, and so, you can get many more benefits than what you get in the open market. For instance, you can get claims for a number of pre-existing diseases, and also covers for newborn babies starting from their day of birth. Employees may also get up to 20 per cent discount on the premium amount.

But these benefits last till you are with the company. There may also be variations in the policies offered. "Some companies offer employees a personal accident cover only while they are on official duty, while others may offer it roundthe-clock. Many others offer cover based on an employee's position in the hierarchy," says Gaurav Garg, managing director and CEO, Tata AIG General Insurance.

While most financial planners think a `5lakh medical policy is a good enough cover for an individual, they prefer erring on the side of caution and advise you to buy some more cover, if the cover is agroup policy. "With medical costs rising, the sum insured by an employer may fall short in case of a large claim. The personal health policy should be able to take care of that situation," says New Delhi-based Rahul Agarwal of Optima Insurance.

Given the rise in lifestyle diseases, employees will need to take into account the nature of the group medical cover being offered before opting for an individual cover for themselves and their family. We deconstructed three familiar situations to find out how much extra cover is needed for individuals who already have a `5lakh group medical insurance.

Single-income nuclear families

Single-earning members planning a career move should opt for an additional cover of at least `3lakh, say financial planners. "Individual policies have a waiting period clause for some diseases. If you already hold a policy, you can meet any eventuality arising in the period between two jobs," says E Kartikeyan of Ladder7 Financial Advisories. Those planning to remain with the same organisation can opt for a family floater, which covers two adults and children. `3lakh-worth Bajaj Allianz Health Guard's family floater will cost an annual premium of `13,379, considering the senior-most member is in the 40-45 years age group.

Double-income nuclear families

Considering their affordability factor, financial planners feel such individuals could up their security quotient by buying policies of `3lakh each. Bajaj Allianz's Health Guard individual policy will cost `4,886 ayear for individuals in the 26-40 years age group and `6,690 for those between 41-45 years.

Single-income families with parents

Since the level of responsibility is higher on a single-earning individual, planners suggest buying a family floater of `3lakh for the wife and kids. For each parent, he/she can either go for an individual policy of `3lakh or opt for individual topups depending on the kind of cover the employer is offering for one's parents. The reason for higher individual policies for parents is that at their age, they are likely to suffer from advanced stages 15,446 a year (age `5,781 a year (till 60 years) and `8,934 a year `2,500 to more

There are several options - individual, family floaters and top-up policies - but check the cost involved firms, and so, you can get many more benefits than what you get in the open market.

Source: http://epaper.business-standard.com/