Month: February 2021

Why Corporate Insurance Is Not Enough.!!

What nobody tells you about corporate health insurance

Do you have a health insurance policy? “No, I don’t need it; my office has given me one.” If this is what your response is then beware — especially if you have no idea about what all your office insurance covers. Corporate insurance cannot be a solution to your health insurance needs. You must have an individual health insurance policy or a family floater policy covering all your members. There are multiple reasons why. We explain you some:

What if you lose your job?

The corporate world could be mean. A lot of people – who lost their jobs during COVID-19 pandemic — learned it hard way. Losing a job, and that too during a health crisis. Had you gotten hospitalised when out of the job, you would have borne all health expenses on your own. So, remember that the day your employment with your employer terminates, you will be out of insurance. This holds true even when you resign from the job. You will be uninsured for the period between joining a new place and the last day in the old office.

Post-retirement coverage

You have been loyal to your employer. You worked there till you retired. Now what? Your employer will not give you lifetime health insurance coverage. Only an individual or a family floater policy may insure you for the lifetime. If you think you will buy a health policy when you turn 60, think again! At the age 60, it is not a matter of choice but availability. Health insurance companies are not bound to accept your policy proposal. If their underwriting process finds you ineligible for the coverage, they will decline your request. Moreover, the policy premium will be quite steep even if they do accept the proposal and will have waiting period for pre-existing disease. If you buy a health policy when you are already young, you may continue it at a cheaper premium for the lifetime while waiting period for pre-existing diseases will have gotten over.

Insurance coverage not enough

The corporate does not give you a choice to hike your insurance cover. It comes with a standard cover, typically Rs 2-5 lakh per employee, which you have to accept. What if you incur more than what your employer provides? It will come to pinch your pockets. How much health insurance do you need? It depends on in which city you reside. You need to figure out the average medical cost in key hospitals nearby.

You lose out on No-Claim Bonus

Do we have to tell you that medical inflation is much more than the average inflation in the economy? The insurance cover that you choose today may not be sufficient after 10 years. Your employer is not going to hike the health cover. An individual health policy, however, comes with a no-claim bonus clause. At no extra cost, if you have not made any claim in a year, your policy cover will increase. This is called no-claim bonus. For example, if you have bought a policy with Rs 5 lakh cover and you don’t make any claims in initial years, your policy cover may rise up to 100-200 per cent going by the health insurer and the policy you have chosen.

One size fits all

As explained above, the corporate insurance is a standard cover. You cannot customise it. Such covers often have many limitations. For example, there could be a limit on room rent. So, if you have taken a private room of say Rs 8000 per day, the corporate insurance may only cover Rs 3000-5000 per day. Similarly, there could be a co-payment clause that says some percentage of the medical bill the insured has to bear herself before the medical policy comes into picture. This could be 20-30 per cent of the medical bill. Moreover, your employer may or may not cover your family members in the health policy.

Corporate insurance a perquisite, not a right

Your employer is not bound to give you a health cover. It can anytime change office policies and withdraw the health cover. In case your company stops paying the premium, you will be out of cover, although your employer will not face any legal ramifications.

Corporate insurance is an attractive prerequisite. It has its benefits. You don’t have to go for medical tests and all diseases are covered from the day one. But, it can still not be your primary cover. Every individual needs to have a comprehensive health insurance policy while corporate insurance may act as a cushion to your health insurance needs. 

 Tax advantage

While tax should not be the primary reason for you to buy a health insurance policy, it indeed is a great secondary benefit. On corporate health insurance since your employer is paying the premium on your behalf, you are not eligible to claim tax deduction against the same. Even if it charges some extra amount for you to enhance your health cover or include your parents and children in the same, you still can’t claim tax deductions. That said, why not take a regular health policy! You can claim a deduction up to Rs 25,000 for the insurance of self, spouse, and dependent children under section 80-D of the Income-Tax Act. An additional deduction of Rs 25,000 is available for the insurance of parents if they are less than 60 years of age, and Rs 50,000 if they are aged above 60.

Making a difference – The Caterpillar Way

Life is a mixture of wants, desires, necessities, luxuries, and realities. All we do is work to have the necessities and pursue the desires and luxuries. And then there is the element of uncertainty in life. Yet, we plan and strive to achieve our goals. Hence, Robert Frost aptly said,

“But I have promises to keep,  
And miles to go before I sleep,  
And miles to go before I sleep.”

But how will an individual who is clocking more than nine hours a day, six days a week, keep the promises? How will the desires and luxuries become a reality? Do people really have time to make informed decisions about investments and growth? Well, that is where Caterpillar comes. We are here to make your dreams come true.

We are here to take the burden of your finances and manage them for you. But first things first — we will listen to you and understand your dreams. Each individual and family is different. All have different goals and Caterpillar doesn’t believe in working on a fixed template. So, we will sit down with you and let you lay bare your desires and then work with you. The psychology of financial planning is something that runs in the background, but it plays its part. We will understand yours and ensure you are on the right track. Financial advice comes with psychology decoding.

As your financial coach, we will help you navigate through life’s several milestones, including smaller needs and wishes to keep you happy and content at regular intervals. A financial plan can’t be just for 10 years hence. It is about the entire life ahead and of those when you leave them behind. We will plan for both — a life with and without you. The sense of security needs to prevail to thrive and stay happy.

A crucial part of planning is making sure it is implemented in a proper manner. We will not only device a suitable plan for you, but also manage your pre-existing investments and portfolios. We will review your needs and investments to make sure you are on the right track. When you have a well-managed portfolio by us, you will have the financial freedom you have always dreamt of.

Just to give you a little insight into what we can offer you, a comprehensive financial roadmap, tailor-made for your needs, will ensure the right amount of cash flow for you anytime you need it. But cash flow management and a sound financial roadmap is the beginning of the elaborate design. Managing the risks and ensuring for them is very important. But you have nothing to worry about because where there is a risk, there is Caterpillar with a way. We will help you with tax and debt management along with all the nitty-gritty of the estate planning, will, guardianship, etc. We run educational training programs on health, wealth and happiness. Our diverse set of experts can guide you with life and career advice as well.

Above all, we are not going to leave you mid-way. We want to see you achieve the goals you have set. And we will make sure to review your portfolios and your plans periodically and suggest changes whenever required. Most importantly, Caterpillar will walk the distance with you, all you need to do is take the first step and come to us.