Are You Solely Relying On Your Corporate Health Insurance? Expert Argues Otherwise

The majority of salaried individuals rely solely on corporate health insurance offered by their employer. What is often overlooked is the fact that these policies are not forever. They expire the moment you make a switch or if in an unfortunate case of layoff.

This gap in understanding can lead to significant risks, especially when considering the importance of continuous health insurance coverage. A retail health insurance policy ensures that you reduce or eliminate waiting periods for pre-existing diseases or critical illnesses, something not always possible with a corporate policy.

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Amit Chhabra, CBO & Head of Health Insurance at Policybazaar.com, explained the benefits of combining retail health insurance with corporate insurance. Chhabra said, If someone has a base claim of Rs 10 lakh, they can claim Rs 3 lakh from one policy and Rs 7 lakh from the other policy.

However, Chhabra cautioned that the process might take a little extra effort. “The only thing that happens at times is getting cashless approval from both policies at the same time can be a bit tough. You have to get approval for the first policy, and only then will the second policy come in. But it’s not unmanageable—it just takes a bit more time.”

Corporate health insurance policies also tend to come with restrictions, like room rent capping or sub-limits. Chhabra said, “It depends on what corporate policy one has. Let’s say the sum insured in the corporate policy is only Rs 2 lakh, but the claim is Rs 10 lakh. The rest 8 lakhs can be paid by the retail policy or even the entire Rs 10 lakh can be paid by the retail policy.

“If a corporate policy has room rent capping, for example, Rs 5000, but you choose a room costing Rs 10,000, only half of the bill will be paid by the corporate policy. In such cases, the remaining amount can be paid by the retail policy.”

Why Retail Health Insurance is Vital

Relying solely on corporate health insurance can lead to major challenges. Chhabra emphasized the importance of having an individual retail health insurance policy.

“Corporate policies are valid only while you are working in the company. If you leave the company, the policy lapses, and you’ll be left without insurance. It often comes with limits, like sub-limits, co-payments, and room rent restrictions, and the sum insured is often low.”

If one waits until retirement to buy a retail policy, one may not qualify for one due to pre-existing diseases. Many diseases come with a waiting period or may even make you ineligible for insurance later.”

Portability of Corporate Policies

When asked about porting corporate health insurance, Ravi Vishwanath, Director of Narayana Health Insurance explained, that you can port your group health policy to an individual policy with the same insurer.

“Inform your insurer 45 days in advance of your request to port. The insurer will consider your application and decide if they can accept you into an individual policy, and the terms of the same,” Vishwanath said.

“However, there is no guarantee that they will accept, or give you favourable terms such as reduction in waiting periods. That is why it is good to always have your private health insurance fully paid up at all times so you have peace of mind,” Vishwanath added.

The Advantages of Combining Policies

While corporate health insurance may seem sufficient at first glance, Chhabra pointed out the advantages of combining it with retail health insurance. “Combining the two gives you additional coverage. Your retail health insurance should be your main policy, and your corporate policy can act as a backup to cover expenses if the retail policy’s coverage is exhausted.”

Additionally, Chhabra mentioned that using your corporate policy first could help preserve the no-claim bonus on your retail policy. “Retail policies often offer cumulative bonuses, which increase the sum insured over time if no claims are made. Using your corporate policy first can help preserve these bonuses in your retail policy.”

Chhabra concluded by emphasising the limitations of corporate health insurance, saying, “Corporate policies are a great benefit provided by employers, but they should be considered backup policies. One must always have an individual retail health insurance policy for long-term coverage and financial security. Corporate policies have limitations and do not last beyond your employment.