Why it’s best to get medical health insurance, even when an employer provides it

Hospitals overflowed. The beds in the intensive care unit (ICU) were scarce. These were the headlines for much of 2020 as the Covid-19 pandemic hit the world. The pandemic, which continues its devastating effects around the world, has been a rude wake-up call to many. Not only has it affected the health of millions of people, but it has also disastrously affected the personal finances of the legions of people who have lost their jobs.

In the United States, one of the worst hit countries, the unemployment rate rose to one of the highest levels in its history. Job loss has an impact on contagion. If you lose your job, it doesn’t just stop your salary. Many related benefits come to a standstill – this may include your employer’s contribution to your retirement assets, premiums, and most importantly, health coverage that is part of the group insurance plan your employer has purchased.

Health insurance is a must

Adequate health insurance is a must in anyone’s overall financial plan. It ensures that a health emergency doesn’t suddenly ruin your finances. The cover provides that the insurer pays for hospital stays and medical bills. The lack of health insurance can cost you dearly if you or one of your family members is faced with a medical emergency.

In such a situation, you have no choice but to pay medical bills from your savings or through borrowing, leading to financial hardship. Health insurance can be taken out in your capacity or as part of plans covering your family. It can also be provided by your employer, whether it’s a private company or the government.

An umbrella for the whole family

Sufficient health insurance coverage becomes even more important if you are married, have children, or have dependent parents. The more numbers that depend on you, the greater the risk of medical emergencies. In the case of Covid-19, the populations most at risk were the elderly, many of whom were frail and unable to fight the virus. They had to be hospitalized and taken to intensive care, where the cost of daily medical treatment could be prohibitive.

With this in mind, the question arises whether you should rely solely on your employer’s health insurance. Your job may be stable and health insurance seems adequate to cover your loved one’s medical expenses. But what if you lose your job? What happens after you retire? Most financial planners recommend that you have your own independent health insurance that runs alongside employer insurance.

It is preferable to have family health insurance, often referred to as a family floater plan. Such plans take care of your health insurance needs and cover the members of your entire family by paying you a small additional premium.

Here are some reasons that make it imperative for you to take out your own parallel individual health insurance in addition to your employer’s health insurance.

Rising healthcare costs

Rising medical costs or what is known as health inflation can mean that your employer’s insurance may not cover your future insurance needs. The employer’s coverage is usually the same for a certain category of employees, regardless of their needs.

Your coverage needs will depend on your age and the age of your loved ones, the medical history of all family members, the hospitalization and medical expenses where you live or those of your loved ones.

The coverage amount is not static

The coverage provided by your employers may not be the same for the following year. For example, if a company has financial difficulties, this can reduce insurance coverage. In addition, the terms and conditions of your employer’s coverage may change from time to time.

Sometimes employers may ask employees to make a co-payment (to bear part of the medical expenses) or to pay part of the premium in order to receive coverage throughout the year. In addition, employers can also discontinue the plan.

The employer’s insurance coverage is limited

Employer-provided group health insurance plans generally have limited coverage, and often these plans are useful to cover routine and normal health insurance costs. Even if the employer provides insurance coverage from the day you start your job, the plans typically don’t offer much insurance coverage.

In general, the employer negotiates all group insurance conditions – the inclusions and exclusions, coverage for relatives, the minimum and maximum amounts – directly with the insurer. Since you are not part of the deliberations, you cannot always make sure that the diseases or surgery you are prone to are covered.

Makes gig workforce safe

If you have your own health insurance, you don’t have to worry about this when changing jobs. Even if your employer doesn’t offer coverage and the job profile looks good for your career, you can still go for it.

The conditions of the insurance cover can change with the contractual activity instead of permanent employment. The gig economy is growing where your needs have to be attended to as employers look for part-time service providers. Health insurance is your responsibility here.

Customize your coverageAge

However, if you were to get your own health insurance, you would weigh your needs carefully. If you plan to expand your family, you can apply for maternity insurance. However, if you are unmarried, this is not required. Instead, you may be interested in critical illness coverage if a family history has a critical illness such as cancer or kidney disease.

You can also opt for a feature that provides daily cash benefits to cover sickness and hospitalization expenses. Such additional services can only be used if you take out health insurance for yourself.

Your next job may not have health insuranceAge

The assumption that all employers provide health insurance is incorrect. Some employers do not offer their employees insurance coverage.

If you need to change jobs, your next employer may not offer group health insurance. If so, you could face massive financial burdens during a medical emergency.

Limitation of the number of insured dependents

Some employers may also limit the number of dependents that are insured under their group insurance. Sometimes parents are not insured and sometimes it can be limited to two children.

There may be families with special children whose medical needs may not be met by the employer.

There is no cover after retirement

Health insurance provided by a private employer would not last beyond your retirement or contracted service life, even if you were covered for your entire working life.

So what if you need to get health insurance at age 60? First, it becomes a challenge to get health insurance yourself at this age as not many insurers are willing to insure it. Even if you do get one, the premium will be too high due to the age factor. The earlier you take out insurance cover in your life, the lower your premium amounts are likely to remain, despite the regular burden (increase in premium) that insurers are allowed to receive, taking into account age and other variables.

You do not bear the risk of waiting.

All health insurances have a waiting period. In simple terms, this means that your insurance cover begins after a certain period of time and only then can you claim the benefits.

Depending on the condition or the disease to be treated, the waiting time can be between a few months and a few years. So if you lose your job or plan to quit or do something yourself and decide to take out health insurance after leaving your job, you need to shorten the waiting time before the insurer pays your medical claims.

What happens if you or one of your family members is faced with a high-cost medical emergency during this waiting period? You will face significant financial burdens. Your own parallel insurance protection protects against this possibility.

It is always good to have health insurance in your personal capacity. And it would be helpful if you started early in your career with a plan of keeping the rewards down with broader benefits. It can only help you in the long run.

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