Why Having a Personal Health Insurance is Crucial

A health insurance policy is a policy which requires only an annual fee and covers all hospital charges and related treatment expenses. In this era, when inflation is at its peak, hospital charges and medicine prices are increasing significantly, making health insurance crucial for every family member. Without health insurance, a serious health issue can drain the financial resources of the individual and their family members.

Over the past few years, awareness of these risks has led more people to purchase health insurance, not only for themselves but for their entire families. Despite this growing awareness of the importance of health insurance, many people still rely on group health insurance provided by their employer. Even though group health insurance has its benefits, personal health insurance is essential for everyone. Here’s why:

Group coverage ends when you change jobs When you switch jobs, the health insurance provided by your employer typically ends the moment your employment terminates. This might leave you in a vulnerable situation during an unexpected medical emergency during the gap between jobs. Without a personal health insurance policy in place, you may be forced to pay out-of-pocket for any medical expenses, which might escalate quickly, leaving you financially overwhelmed.

Group policy coverage may not be sufficient: Group health insurance plans typically offer a limited sum ranging from 1 to 3 lakhs. While this coverage may be adequate for routine medical issues, it falls short when faced with major medical conditions such as surgeries, critical illnesses, or long-term treatments. High medical costs, especially for treatments like cancer or organ transplants, can exceed the basic coverage provided by most group policies, leaving you responsible for the shortfall. In such instances, personal health insurance becomes an invaluable safety net.

Developing health issues makes future policies harder to obtain: Many people delay purchasing personal health insurance because they are currently healthy. However, once you develop a medical condition like hypertension, diabetes, or even something more serious like cancer, obtaining a new health insurance policy becomes increasingly difficult. Insurance companies avoid to issue comprehensive policies to individuals with pre-existing conditions, or they may offer limited coverage at much higher premiums.

Group policy benefits aren’t portable:Group health insurance plans often lack portability, meaning you cannot transfer the benefits you’ve accrued to a new personal health policy if you change jobs or leave your employer.

Co-pay clauses in group policies shift costs to employees: Due to rising medical claims, many group health policies have introduced co-pay clauses. This means that a portion of the medical expenses—often between 20-30%—must be paid by the employee, and the insurer will cover the remaining amount. While this might seem manageable for smaller claims, even a modest hospitalization bill of 50,000 could leave you responsible for 10,000 or more. For larger claims, this co-pay can become a significant financial burden, especially if you are relying solely on group insurance.

If you don’t have personal health insurance, it’s time to get one. Even those covered by employer-provided group policies should consider buying a minimal-risk cover for their families. A personal policy can serve as additional coverage, providing financial protection beyond what your group insurance offers. Moreover, premiums for a family floater policy covering 3-4 members can be as low as Rs. 10,000 per year.

Just like individuals buy their homes, cars, and other assets despite having access to company-provided accommodations and vehicles, it’s important to build your own health insurance plan. Leaving a job means giving up company-provided assets, which includes losing group health coverage—potentially putting your financial future at risk.

Why Having a Personal Health Insurance is Crucial – Even with Group Coverage