It should be evident to most of us that those with a non-permanent or corporate job should not rely on their group health insurance or group life insurance because they can lose the job anytime and become uninsured.
I have heard stories of those who became hospitalised the day after they left the job or were terminated. In one instance, hospitalization arose due to an accident on the ride home from work after the farewell party! So it is obvious to any fan of commonsense that private health and life insurance is a must.
However, this does not mean those with a permanent/secure job or even a relatively stable job can get away with group life or group health coverage. This is because, unlike private insurance, a group policy is a new policy even if your employer renews the agreement with the same insurer!
It is easy to understand why. Unlike a private policy, an organisation’s insured pool keeps changing, so the group policy is issued fresh each year. The trouble is because it is a new policy each year, the term and conditions also change each year!
For instance, a group insurer covering pre-existing diseases from day one may suddenly decide to remove that clause if it affects their profitability. Or they can increase the premium steeply. Of course, we would expect the organisation to negotiate a better deal with someone else, but that is impossible forever. Once all insurers get enough market share, they would be under the hammer of claims. See: Claim rejection data for standalone health insurers for FY 2021-2022. The point is they are unreliable.
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Some group insurers offer an add-on opinion for extra coverage for both life and health insurance. These add-on covers can be opted for by individuals at extra cost. However, these add-on options can be suddenly removed.
Another important reason not to rely on group insurance is the HR team getting the deals may not always be well informed of all terms and conditions of insurance. We will have to live with what they work out.
In summary, enjoy the benefits of group policies (as long as they last!) but never rely on them. Always buy private life and health insurance per your family’s needs.
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- Dr M. Pattabiraman (PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras.
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Most investor problems stem from a lack of poor decision-making. We made bad decisions and money mistakes when we started earning, and we spent years undoing them. Why should our children go through the same pain? What is this book about? As parents, what if we had to groom one ability in our children that matters not only for money management and investing but for every aspect of life? My answer: Sound decision-making. So, in this book, we meet Chinchu, who is about to turn 10. The story follows what he wants for his birthday and how his parents plan it, while also teaching him key ideas about decision-making and money management. What readers say! 
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