Is It Prudent to Include Your Parents in Group Health Insurance

While joining a company, most employer’s provide extra benefit to their employees in the form of group health insurance. This health insurance is provided for free by default by the employers, and the benefits included in it remain the same for every employee. This health insurance is a form of extended cover, wherein the employee’s spouse and two children are generally included. The organisation also provides an option of adding your parents in the same plan either for free, or you may need to pay an extra premium amount to avail it.

Now, the question is whether it’s worth including your parents in the group health insurance policy? Let’s analyze the pros and cons of the group health insurance to arrive at an answer to this question.

Firstly, let’s understand the suitability of an insurance plan for senior citizens

1. Age of entry and coverage period: When it comes to buying health insurance, there are very many options available in the market. But, as the age of individual increases, the options become limited. Also, when we talk about plans for senior citizens, there are various terms and conditions imposed by the insurers making the choice all the more limited. Thus, a good health insurance plan for senior citizens should have a higher age of entry and coverage for a lifetime.

2. Pre-policy medical check-up: Most health insurance companies have a prerequisite of a pre-medical checkup. It is done to determine the current medical condition of an individual and also to check the probability of medical problems in the future. Now you know, this pre-medical checkup is a problem for getting your parents’ health insurance.

3. Waiting period: Every health insurance company has a pre-defined waiting period before some or all of our coverage can begin. Plans with a shorter waiting period become a better health plan.

4. Regular medical checkups: Most insurers provide the benefit of availing free medical checkups at the network hospitals. Though there are various terms and conditions attached to it depending on the type of insurance you purchase. The plans with less complexity become a better choice.

5. Coverage for critical illnesses: The plan that covers a large number of critical illnesses with simpler terms and conditions is a better plan to choose.

Now that you are aware of the features of a good health insurance plan. Let’s analyze how the inclusion of parents in an employer’s group health insurance can work in your favour.

Benefits of inclusion of parents in group health insurance:

1. No pre-policy medical checkup: Under the employer's group health insurance, there is no prerequisite of pre-policy medical health. You and your family members get hassle-free coverage from day one.

2. Cheaper premium: The premiums related to a group health insurance are generally less expensive than the premium amount for an individual health policy. Thus, if you buy group health insurance for your parents, it would end up being cheaper than any other individual health plans available in the market.

3. No waiting period: There is no waiting period concept in a group health insurance plan. Most of the conditions/diseases are covered from day one by the group health insurance. For some companies, even the maternity coverage for female employees is applicable without any waiting period.

4. Coverage for pre-existing diseases: If your parents already have some pre-existing conditions like diabetes or heart ailments, group health insurance is an answer to it. In group health insurance, pre-existing diseases are covered without any waiting period. Thus, they can undergo treatment for such diseases right away and avail the claim. However, it varies from one insurer to another.

5. Benefit of top-up or super top-up: The coverage offered under a group plan is generally for a small amount. However, you can always increase the coverage amount by attaching a top-up or super top-up plan to your group plan by paying an extra amount for it. The coverage amount of group insurance can be used for paying off hospitalisation expenses till the deductible limit. Once the deductible limit is exhausted, then the top-up and super top-up plan come into effect. One thing to note, under a super top-up plan, the deductible amount has to exceed over the entire policy year and under a top-up plan, the deductible amount has to be breached in a single hospitalisation.

No doubt, there are a host of benefits of group health insurance. However, there are some glitches which you have to keep in mind before the inclusion of your parents in your group plan. Let’s have a look

Disadvantages of inclusion of parents in group health insurance

1. Continuity of plan on the employer’s discretion: The continuation of the plan is totally dependent on the employer’s discretion. The employer can anytime choose to discontinue the scheme or lower the coverage provided under the scheme. They may also decide to stop extending the benefit to your parents, leaving you at a financial setback.

2. Discontinuation of the policy due to change of job: The group health insurance stands valid till the time the organisation employs you. The moment you change your job, there is an automatic termination of the policy, and with it, the benefits of the policy would also come to an end. So, till the time a new group plan comes into effect, you would be left without any cover.

3. Limited coverage: With the health care cost rising at a rapid rate, the coverage of Rs. 3-5 Lakh provided under a group health insurance plan most of the time stands insufficient. Also, if you include your parents under group health insurance, there are high chances of multiple claims for the parents in a year due to old age. Thus, the other members of the family are left with minimal sum assured.

4. Frequent claims: There will be more frequent claims with the inclusion of parents under the group plan. This can reduce the overall cover under the plan unless and until you decide to pay a higher premium at the time of renewal.

5. Higher premium: The premium of the group health insurance plans is dependent on the average age of the employees in the group. If there are more older people in the group, then you are more likely to pay a higher premium amount to get a group health insurance plan.

However, whatever may be the drawbacks of the group health policy, it definitely stands a win-win situation for the employees. Here, you can get health coverage for your family, including your parents just by paying an extra premium. Also, with the features such as no waiting period, no pre-policy medical checkup, and coverage for pre-existing illnesses, the advantages are hard to ignore. But, on the other hand, the disadvantages such as no guarantee of continuity of plan, limited coverage, and early exhaustion of coverage amount is the bitter truth of a group plan.

So, if you can afford it is advisable to have an independent health insurance plan for your parents and use the group health insurance as a backup. The group policy can be used until the completion of the waiting period for pre-existing conditions, and post that group plan can only be used as a backup. If you need any assistance in this regard, please feel free to contact us at customersupport@insurancedekho.com.

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