Sunday, October 8, 2023
HomeMutual FundShould I claim through corporate cover or personal health insurance policy?

Should I claim through corporate cover or personal health insurance policy?


Many clients often inquire whether to use their personal or corporate health insurance policy first. Let’s figure out whether you should use your corporate or personal health insurance in case of hospitalization, assuming there are no room rent sub-limits in both policies.  I thank Melvin Joseph Sir (Finvin Financial Planners), who provided valuable input for this article.

About the author: Ajay Pruthi is a fee-only SEBI registered investment advisor. He can be contacted via his website plnr.in. Ajay is part of the freefincal list of fee-only advisors and fee-only India.

But first, I would like to share what happened with one of my clients hospitalized due to Dengue fever. He has two insurance policies from the same company: a base policy worth 10 Lakhs and a super top-up policy worth 40 Lakhs.

He tried to get cashless approval for a bill of 1,00,000, but the request was rejected. The rejection was because he applied for a cashless claim using the details of his super top-up policy, which has a deductible of 10 Lakhs. He should have applied for a cashless claim using the base policy of 10 Lakhs. Unfortunately, the insurance company didn’t check if he had a base policy before rejecting the claim. 

Understanding the difference between base and super top-up policies is essential. In times of emergency, knowing how to make insurance claims is crucial. I recommend reading the article below to educate yourself and your spouse on this matter, as it can be helpful in case of hospital emergencies. FAQ: Super Top up Health Insurance policy

Now, to the problem at hand. In the case of an emergency, you can use either corporate cover or private health insurance. There is no need to think twice. Always use base cover first and super top-up cover after the base cover is exhausted if you use a personal health insurance policy.

However, if your hospitalization is planned, you have more options and flexibility in choosing insurance. Let’s explore different scenarios to determine the best choice for each type of insurance.

It’s generally a good idea to use your corporate health insurance policy as corporate insurance claims are often processed smoothly and usually cover pre-existing diseases. Also, insurance companies value their relationships with corporate clients since it’s an important part of their business.

However, there are a few things to be aware of and consider –

Too lazy to claim the co-payment amount – If you find yourself too lazy to claim the co-payment amount through your personal health insurance policy, if there’s a co-payment clause in your corporate policy, it’s better to use your personal health insurance policy. 

*Co-payment – If your hospital bill is Rs. 1 Lakh and co-payment is 20%, then the health insurance policy will pay 80,000, and you will have to pay 20,000.

Let me give you an example – Suppose one of your family members gets hospitalized, and you opt for the corporate health insurance policy for a cashless claim. The corporate health insurance policy has a co-payment clause of 20%. The total hospital bill was Rs. 3 Lakhs, which means 2.40 Lakhs would be paid by the corporate health insurance policy and Rs. 60,000 from your own pocket. 

This 60,000 can be reimbursed through your personal health insurance coverage, but there may be a few hassles in doing the extra work to claim this 60,000. If you don’t want the hassle of claiming the co-payment amount through reimbursement in your personal health policy, opting for your personal health insurance is better. If there is no co-payment in your corporate health insurance coverage, opting for your corporate health insurance is better.

Parents in corporate health insurance cover –  If parents are covered under your corporate health insurance policy, and the coverage amount is not substantial, it’s advisable to claim from a personal health insurance policy (if you are using a health insurance policy for anyone other than your parents)

I’ve noticed that many clients don’t get separate health insurance coverage for their parents because their parents are already included in their corporate policy.

Let me give you an example – Suppose your spouse gets hospitalized, and the total hospitalization cost is Rs. 4 Lakhs. You opt to claim from a corporate health insurance policy, and the total corporate health insurance cover for the family (including parents) is 5 Lakhs. 

Then you could claim only 1 Lakh if your parents are hospitalized during the same year; the remaining amount must be paid from your own pocket.

However, if the coverage provided by the corporate policy is significant enough (if you have increased your base cover or added a top-up to enhance the coverage by paying an extra premium), you can claim through it. 

Expenses required for hospitalization – If the expenses for a specific treatment exceed the coverage amount provided by your corporate health insurance, but your personal health insurance (which includes both base and super top-up cover) offers more coverage than needed, it’s always best to claim from your personal health insurance policy. This way, you can ensure that all your medical expenses are adequately covered without any financial burden.

Personal base and super top-up policy and corporate policy from the same insurer If you have a personal base policy, super top-up policy, and corporate policy all from the same insurance company, you can follow this approach: Use the corporate policy first, and if the expenses exceed the coverage of the corporate policy, you can switch to the personal super top-up policy to cover the additional costs. In this situation, there’s no need to use the personal base policy, but make sure there’s no co-payment clause in your corporate health insurance policy. This way, you can maximize your insurance coverage effectively.

Personal base and corporate policy from the different insurers –   If you have both personal and corporate health insurance policies from different insurers, and the coverage amounts are relatively small (assuming you do not have a super top-up policy), here’s how it works:

Let’s say you have a personal health insurance cover of 5 Lakhs and a corporate health insurance cover of 5 Lakhs for your family. If you require hospitalization that costs 7 Lakhs, you have two options. You can use your personal or corporate policy (assuming no co-payment clause). In this case, 5 Lakhs can be claimed cashless, and the remaining 2 Lakhs should be reimbursed.

If one of the policies has a co-payment clause, the scenarios will vary depending on the total cost of treatment.

All the above points are for your convenience, as they allow you to get a cashless claim in many situations.

During emergencies, you can always get the amount reimbursed through either your corporate or personal policy.

However, it’s essential to have emergency funds set aside in addition to your health insurance coverage. These funds can be used if needed for any unexpected medical emergencies. Insurance and emergency funds will provide you better financial security and peace of mind during challenging times.

*Disclaimer- Nothing in the article is my solicitation, recommendation, endorsement, or offer. If you have any doubts as to the merits of the article, you should seek advice from an independent financial advisor. Registration granted by SEBI, BASL membership, and NISM certification does not guarantee the intermediary’s performance or provide any assurance of returns to investors. Investment in the securities market is subject to market risks. Read all the related documents carefully before investing.

Do share this article with your friends using the buttons below.


🔥Enjoy massive discounts on our courses, robo-advisory tool and exclusive investor circle! 🔥& join our community of 5000+ users!


Use our Robo-advisory Tool for a start-to-finish financial plan! More than 1,000 investors and advisors use this!


New Tool! => Track your mutual funds and stock investments with this Google Sheet!


Follow Freefincal on Google News
Follow Freefincal on Google News
Subscribe to the freefincal Youtube Channel. Subscribe button courtesy: Vecteezy.
Subscribe to the freefincal Youtube Channel.
Follow freefincal on WhatsApp Channel
Follow freefincal on WhatsApp

Podcast: Let’s Get RICH With PATTU! Every single Indian CAN grow their wealth! 

Listen to the Lets Get Rich with Pattu Podcast
Listen to the Let’s Get Rich with Pattu Podcast

You can watch podcast episodes on the OfSpin Media Friends YouTube Channel.

Lets Get RICH With PATTU podcast on YouTube
Let’s Get RICH With PATTU podcast on YouTube.

  • Do you have a comment about the above article? Reach out to us on Twitter: @freefincal or @pattufreefincal
  • Have a question? Subscribe to our newsletter with the form below.
  • Hit ‘reply’ to any email from us! We do not offer personalized investment advice. We can write a detailed article without mentioning your name if you have a generic question.

Join over 32,000 readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email!


Explore the site! Search among our 2000+ articles for information and insight!

About The Author

Pattabiraman editor freefincalDr. 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. He has over ten years of experience publishing news analysis, research and financial product development. Connect with him via Twitter, Linkedin, or YouTube. Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (CNBC TV18) for DIY investors. (2) Gamechanger for young earners. (3) Chinchu Gets a Superpower! for kids. He has also written seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation promoting unbiased, commission-free investment advice.


Our flagship course! Learn to manage your portfolio like a pro to achieve your goals regardless of market conditions! More than 3,000 investors and advisors are part of our exclusive community! Get clarity on how to plan for your goals and achieve the necessary corpus no matter what the market condition is!! Watch the first lecture for free!  One-time payment! No recurring fees! Life-long access to videos! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence.


Our new course!  Increase your income by getting people to pay for your skills! More than 700 salaried employees, entrepreneurs and financial advisors are part of our exclusive community! Learn how to get people to pay for your skills! Whether you are a professional or small business owner who wants more clients via online visibility or a salaried person wanting a side income or passive income, we will show you how to achieve this by showcasing your skills and building a community that trusts you and pays you! (watch 1st lecture for free). One-time payment! No recurring fees! Life-long access to videos!   


Our new book for kids: “Chinchu gets a superpower!” is now available!

Both boy and girl version covers of Chinchu gets a superpower
Both the boy and girl version covers of Chinchu gets a superpower.

Most investor problems can be traced to a lack of informed decision-making. We have all made bad decisions and money mistakes when we started earning and spent years undoing these mistakes. Why should our children go through the same pain? What is this book about? As parents, what would it be if we had to groom one ability in our children that is key not only to money management and investing but to any aspect of life? My answer: Sound Decision Making. So in this book, we meet Chinchu, who is about to turn 10. What he wants for his birthday and how his parents plan for it and teach him several key ideas of decision-making and money management is the narrative. What readers say!

Feedback from a young reader after reading Chinchu gets a Superpower (small version)
Feedback from a young reader after reading Chinchu gets a Superpower!

Must-read book even for adults! This is something that every parent should teach their kids right from their young age. The importance of money management and decision making based on their wants and needs. Very nicely written in simple terms. – Arun.

Buy the book: Chinchu gets a superpower for your child!


How to profit from content writing: Our new ebook is for those interested in getting side income via content writing. It is available at a 50% discount for Rs. 500 only!


Want to check if the market is overvalued or undervalued? Use our market valuation tool (it will work with any index!), or get the Tactical Buy/Sell timing tool!


We publish monthly mutual fund screeners and momentum, low-volatility stock screeners.


About freefincal & it’s content policy. Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on mutual funds, stocks, investing, retirement and personal finance developments. We do so without conflict of interest and bias. Follow us on Google News. Freefincal serves more than three million readers a year (5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified with credible and knowledgeable sources before publication. Freefincal does not publish paid articles, promotions, PR, satire or opinions without data. All opinions will be inferences backed by verifiable, reproducible evidence/data. Contact information: letters {at} freefincal {dot} com (sponsored posts or paid collaborations will not be entertained)


Connect with us on social media


Our publications

You Can Be Rich Too with Goal-Based Investing

You can be rich too with goal based investingPublished by CNBC TV18, this book is meant to help you ask the right questions and seek the correct answers, and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now.


Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want Gamechanger: Forget Start-ups, Join Corporate and Still Live the Rich Life you wantThis book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at a low cost! Get it or gift it to a young earner.


Your Ultimate Guide to Travel

Travel-Training-Kit-Cover-new This is an in-depth dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, and how travelling slowly is better financially and psychologically, with links to the web pages and hand-holding at every step. Get the pdf for Rs 300 (instant download)


 



RELATED ARTICLES

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisment -
Google search engine

Most Popular

Recent Comments