Employer-provided group insurance is a great starting point, but it’s essential to evaluate whether the coverage meets the specific health needs of both employees and their parents and to consider adding supplemental insurance if needed
Many employers in India provide group medical insurance as an added benefit for employees, often extending coverage to family members, including senior citizen parents. This coverage, known as Group Mediclaim for parents (GMC for parents), may have its cost or premium shared by you and your employer, or you might cover it entirely. Typically, premiums for these employer-provided plans are lower than those for individual policies on the market. But is this coverage truly sufficient?
Pros And Cons Of GMCs For Your Parents: Says Niharika Singh, ED marketing, IFFCO Tokio General Insurance Company: “Group medical insurance offers several advantages. It is typically provided to employees at no additional cost, making it affordable to access healthcare benefits. Employees benefit from immediate coverage, as there is usually no waiting period. Additionally, group policies often include extra benefits such as maternity and newborn coverage, outpatient (OPD) services, and buffer coverages for unexpected expenses. Another convenience is that pre-policy medical check-ups are generally unnecessary, simplifying the process.”
However, there are some downsides. “The coverage details are decided by the employer, leaving employees with limited input on the policy features. This can make it challenging for employees who might want specific benefits that are not included. Additionally, the coverage ends when the employee resigns, leaving them without insurance unless they secure a new policy,” adds Singh.
Employer-provided group medical insurance that also covers parents can be a significant benefit, but its appropriateness is determined by various criteria. On the plus side, it often has cheaper premiums due to the pooled risk of a bigger group, and employers may cover a considerable percentage of the cost, making it less expensive than individual plans. Furthermore, having coverage for both employees and their parents under the same plan simplifies administration and ensures continued coverage for older family members.
“Group insurance policies may have limitations. Coverage may be limited compared to an individual plan, and pre-existing diseases or specialist treatments may be excluded. Furthermore, the network of doctors and hospitals may be more restricted, and the quality of care may differ depending on the insurer and plan design. In some circumstances, premiums may climb over time, especially if the group has a large number of claims,” says Rahul Banerjee, Managing Director, PGP Academy, financial planning and wealth management institute.
“Lastly, while employer-provided group insurance can be an excellent starting point, it is critical to assess if the coverage satisfies the unique health needs of both employees and their parents and to consider augmenting it with supplemental insurance if necessary,” adds Banerjee.
The amount of medical cover given to parents in a policy will vary from one to another. It is a factor of what the company has asked for in their group medical insurance as a benefit.
“Normally, there is some amount of coverage for the parents of the employee. In some other cases, there is coverage available for in-laws as well. Typically the coverage tends to be limited to between Rs 2-5 lakh. In some cases, there is an option for the employee to pay the premium and avail of the cover for their parents in their group medical policy. Hence, there is a lot of variance in what one may get,” says Suresh Sadagopan, founder and principal officer of Ladder7 Financial Advisories, a financial planning and wealth advisory firm.
“However, it may be a very good option especially when the parents are old and generally ineligible for getting a policy on their own elsewhere. The flip side is that such policies are available only till one is in employment. Few companies allow one to continue the policies as individual policies while leaving the employment - but that is not very common,” adds Sadagopan.
Recommendations For GMC:
Supplement With Separate Insurance:
While adding your parents to a GMC policy is beneficial, securing a separate health insurance plan offers higher, continuous coverage.
Evaluate Their Healthcare Needs:
Consider your parents' specific health needs and select a sum insured that aligns with them. Retail plans allow for higher, customizable coverage.
Select Comprehensive Plans:
Look for policies covering hospitalization, pre- and post-hospitalization expenses, and critical illness benefits.
Plan For Job Transitions:
Avoid coverage gaps during job changes by keeping an independent health policy in place.
Compare Plans Carefully:
Review and compare policies for premiums, coverage, exclusions, and claim settlement ratios to choose the best option for your parents.