Why are group health insurance policies not sufficient?

People working in private organizations like MNCs, business organizations, banks, and housing societies get delighted when they are offered group health insurance policies. However one should show that group health insurance policies are not sufficient. Group health insurance policies are beneficial for the organizations are premiums paid are relatively less compared to individual health policies.

Group health insurance policies are not sufficient because 1. There is no guarantee of health coverage with the job 2. problem of coverage amount reduction 3. Insufficient coverage amount and 4. lack of coverage after retirement.

1. Health coverage not guaranteed with the job

There is a misconception that all organizations provide the benefit of health insurance to employees. Only around 50% of organizations provide health cover benefits and if an employee changes job and joins the other 50% of companies that do not provide health insurance cover, then there will be massive trouble during health emergencies.

2. Problem of coverage amount reduction

Companies when facing a financial crunch always consider the option of reducing the coverage amount in the health insurance policies provided to the employees. In order to do so, they will exclude the dependants of the employees, like parents, wives, children from the insurance cover. Companies may shrink the policy cover and they may force the employees to pay part of the insurance premium from their pocket.

3. Insufficient coverage amount

Group health insurance policies offered by the companies range from Rs 2-3 lakhs and this is extremely insufficient. As per the studies and research, an employee should get 6times the salary as the insurance cover. This shocking gap can be bridged only with the help of a personal insurance policy.

4.  Lack of coverage after retirement.

Group health insurance policies offered by the companies will cease to cover employees' health after their retirement. This is a huge drawback and it is not a good proposition to go for a personal insurance policy after retirement at the age of 60. At that age, it is extremely difficult to find an insurer and the policy comes with waiting times, pre-existing illnesses, and many such constraints. 


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