I have always held the view that you should have your own medical and life insurance – do not trust your company to cover you sensibly.

Most general insurance (medical) decisions in corporate India is a finance and HR decisions. Rarely, if at all are they equipped to handle this decision. Let me give you an example.

One company was paying Rs. 40 lakhs as an annual premium to one of the government companies for a ‘group medical cover’. One year there were claims for Rs. 17 lakhs…and the insurance company decided to raise the premium by Rs. 10 lakhs – and the premium went up to Rs. 50 L

The CFO baulked..and asked for a reduced premium…then they agreed to Rs. 40L.

They had just changed one clause…the new people joining would not be covered for existing illness, and their spouses would not be covered. Simple stroke of the pen. Appearing in the exclusion statement…and the company continued to exist.

One small issue though…when the husband of one of the new employees had a problem….there were red faces!

Sadly life and medical insurance cannot be BOUGHT after the event is over…..so do not tell me I did not warn you.

Why people do not understand that there many things that are beyond their understanding….?

Ego or sheer foolishness or overconfidence?

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  1. Subra,

    I have been a regular reader of your blog for a couple of years now. Thanks for very insightful articles that you keep publishing.

    I work for a company who’s Chairman Emeritus considers himself as Mahavishnu of Ethical Corporation (you must have figured it by now). For all talk, back in 1999, the company provided a group health insurance cover of 2 lakhs per employee that covered upto 4 people including spouse, children and parents in the same order. Cut to 2012, it was raised to 2.5 lakhs last year upto 4 persons excluding parents with several sub and sub-sub clauses excluding plethora of things…

    Talk about inflation and medical inflation which far outstrips the consumer goods inflation…

  2. Expecting someone (a.k.a.your employer) to help with your life & more importantly, health insurance is — altruism. It is NOT right to expect it from profit-motive Companies. Companies may have started these privileges with the right intention – but, when it pinches them financially badly, they have every right to withdraw them.

    Take proper cover is essential. More than life, health insurance is the most ignored part. Most depend on employer insurance.

  3. Subra….you have time and again stated that PSU are better bet for medical insurance.
    Have you studied recent trends, companies like MaxBupa, Apollo….what plus/minus you still feel are still there when comparing these new ones with PSUs.
    (apart from price factor).


  4. philosophically i will still say the same thing…these 2 cos. do not change my view..BUT PLEASE REALISE THAT THIS IS MY PERSONAL VIEW..as usual

  5. Subra Sir,

    Very well said. Coming back to health insurance, nowadays most employers are also asking employees to pay 1/3rd of the premium and for parents there is a co-pay of 20% too.


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