Job change: A change in job results in the health insurance provided by the previous employer coming to an end. The new employer may not offer a health cover, or may have lower sum assured or sub-standard features or poor services. That said, now, in the group health cover, insurance companies have also started giving an option for the employee to move to the normal health cover by the same insurance company. This is an early trend and needs to be watched carefully how this works out.
Start of own venture: If one starts on his own or joins a start-up, then he may not have any health cover. A secondary cover helps in this case.
Time between job changes: A cooling period of 1 or 2 month break in between job changes means that you neither have health cover from the old company, nor from the new one. Even when you join the new company, the claim may not be admissible for the first 30 days. It may be possible that during this interim period, there is a hospitalization in the family for which you need health insurance cover. A secondary health cover can help to meet such needs.
Cost cutting by the company: If your employer decides to lower the amount of health cover, features or flexibility, then it can be a risk exposure for you. It’s very difficult as an employee to negotiate against such changes.
Working abroad: If you move to a foreign location, you may get a health cover. But will this cover your family, back home? Maybe or may not be.
Cover for Older Parents: If one has older parents, it may be difficult to get a health insurance cover for them. The personal cover can be used for self & family and office cover can be reserved for parents.
Get in early: Given the standard waiting periods for specific diseases and for pre-existing diseases, opting for a secondary health insurance at an early stage will help as one may develop ailments at a later stage in life.
Retirement: There are very few corporates who extend medical cover benefits post retirement. If your health is not good, you may either have to pay a higher premium, or may even be declined a health cover. Thankfully, the maximum entry age is typically 65 years. However insurance companies are very conservative while extending the health cover at this age. Taking a new health cover while you retire may not only prove to be expensive, but may also not be possible in some cases.
Relying solely on a corporate health cover can therefore be a risky proposition. The main advantage of not taking a secondary health insurance is saving on premium costs.
Alternate way: If you are just starting your career in your late 20s and do not have a huge family responsibility, you can stick to a corporate cover and take a top-up cover with the deductible being equal to the corporate cover. Another scenario is if both the husband and wife are working with sufficient individual corporate covers which also include the parents, then you can opt for a top up cover for now. A top up cover is an additional insurance, over and above the existing health cover.
The Top-up health cover as a product is still evolving in the Indian markets. Although a top up plan is less expensive, there are some drawbacks. A top up health plan comes into force only above a certain limit, known as the ‘deductible’. If your corporate health cover amount is lower than this deductible amount, then you will have to pay the difference from your pocket. Further, top up plans usually work when the claim amount exceeds the deductible in a single occurrence of hospitalization by a single member. Some of the top up covers have provisions to convert to a nil deductible policy at the time of retirement. Some of the super top up cover products also allows you to make multiple claims during the year.
Apollo Munich’s Optima Super is a Super Top up plan and can be converted to a full-fledged health insurance plan close to retirement. On conversion, you do not have to undergo the waiting period requirements. While this is a benefit, be aware that the premiums will increase on conversion, as you are moving from a ‘deductible’ to a ‘nil deductible’ plan.
The question of whether or not a secondary health insurance is needed should therefore be analyzed carefully, keeping in mind individual requirements and financial situations. As a best practice, it is strongly suggested to have a secondary health cover in place.
The analysis is valid only on the day being published. Readers should study the prospectus of the insurance company for further analysis and consult an adviser before making any decision.
The author can be reached at firstname.lastname@example.org