Individual Health Insurance, Corporate Cover, or Contingency Fund- Which one is better?

The perilous COVID-19 pandemic has made everyone realize the importance and value of health insurance policies because everyone (irrespective of their ages) is susceptible to getting sick due to this lethal virus. Apart from the COVID-19, the younger generation is also vulnerable to many other vector-borne diseases like Dengue. This means anyone may need hospitalization due to these healthcare emergencies/diseases. Unfortunately, if a person gets admitted due to any particular disease, no insurer will offer an insurance cover to the person, especially for that disease.

To safeguard your savings and to avoid financial turmoil, you must get a cover that will compensate for all medical expenses due to hospitalization. A wholesome financial plan will lessen qualms in reaching financial goals and offer sufficient coverage for all healthcare exigencies.

To protect your health contingencies, what should you prefer? For example, you can opt for a contingency fund or choose a corporate insurance policy or take an individual health insurance cover; which one would be the most suitable option?

Let’s dig deeper and compare contingency funds, corporate health insurance cover, and individual health insurance.

Contingency Fund

To cope up with unanticipated emergencies, a person should be equipped with some cash. You can keep some cash at your home, some in the savings bank account and some in breakable FDs or in liquid funds that will help you to deal with unforeseen emergencies.

But, no one can assess when he/she or his/her family members may fall sick, what would be the expenses of hospitalization and how frequently they need to get admitted to the hospital. So, you need to create a contingency fund under any situation.

Importance of Contingency Fund

• Protect you from an extra debt

The prime utilization of a contingency fund is to safeguard you from depending on credit to fulfill the requirements under any emergency. When an emergency hits, you may not have any other option rather, take a loan or use a credit card to overcome the situation. Thus, you may need higher interests in upcoming years. Here comes a contingency fund that will support you in any emergency and keep you away from taking on too much debt.

• Assists you with financing significant crisis

A contingency fund will help you to fulfill all emergency financial requirements. It supports you in dealing with the monetary crisis without compromising your daily expenses. Without this type of fund, the unpredicted emergencies may make a hole in your pocket. Thus, it would become difficult for you to perform your regular activities.

• Minimizes financial stress

A contingency fund is imperative as it minimizes your monetary stress and inspires you to meticulously plan your next course of action.

• Limitations

Once an emergency hits due to illness or hospitalization, you can’t solely depend on contingency funds for your healthcare expenditures.

Corporate Medical Insurance

These days, many companies embrace their employees with a group mediclaim policy to enhance their safety, security, and productivity. Companies usually pay the premiums on behalf of their employees so that everyone can stay protected under the base policy. But if you want additional coverage, you need to pay an extra premium amount from your pocket.

Corporate health insurance offers higher benefits as compared to individual health cover.

Corporate Health Insurance Benefits

• Adequate health coverage

Under corporate health insurance plans, all employees and their family members are covered adequately against various ailments.

• Pre-Existing Disease Cover

Some organizations offer their employees health insurance cover where they can enjoy the benefits of pre-existing health conditions from day one. Some even offer insurance to employees with chronic ailments such as diabetes, hypertension, and the likes.

• Maternity Coverage

Some corporate organizations offer high maternity health insurance along with childbirth expenses to take care of their female employees.

• Support in Times of Sudden Medical Emergencies

Corporate medical insurance plans play an imperative role in healthcare emergencies. If an employee or his/her family members experience a sudden medical emergency, then this coverage assists them to get the best quality of treatment for their ailments.

• Performance and Morale-Boosting

Since employees and their loved ones are covered with corporate health insurance plans, they can now work freely without much thinking about their finances. This boosts their morale and improves their performance.

Limitations

• The corporate health insurance plan will stop working once an employee leaves the organization after retirement or switch to another company.
• Retired employees are more prone to various diseases because of their age. They need a comprehensive cover that will help them to stand against various diseases. But these people are not eligible for corporate health insurance coverage.

Though corporate health insurance plans are vital, still, one should not solely depend on them. Thus, everyone should purchase an individual health insurance policy to deal with healthcare emergencies and medical inflation.

Individual Health Insurance

In this fast-paced world, individual health insurance is a necessity for everyone. Because your contingency fund may get drained in one or two hospitalizations, and a corporate cover will stop working once you leave the organization. Thus, to enjoy all benefits of a healthcare policy, you need to purchase individual health insurance cover.

Benefits of an Individual Health Insurance Policy

The experts recommend purchasing an individual health insurance cover at an early age to enjoy maximum coverage at lower premiums. Some other benefits of the individual health insurance policy are,

• Tax Benefits: You are eligible for tax benefits against all your health insurance premiums under section 80D of the Income Tax Act.
• No Claim Bonus: Many insurance companies uplift your coverage to the basic sum insured as no claim bonus for each claim-free year.
• Wide range of coverage: A comprehensive health insurance policy will give you adequate coverage against various illnesses. By opting for various riders, you can even enhance your base plan.

The above article gave you a thorough knowledge of various health insurance plans. Each plan has some upsides and limitations. Choose the right health insurance plan to sustain yourself against various unanticipated scenarios based on your healthcare requirements.