One of the most common encounters I have with people who do not have their own personal insurance is because they assume that their company insurance is sufficient. In this article, I hope to raise a few considerations for anyone hoping to solely rely on their company insurance.
1. Will you ever change your job?
2 years ago, I serviced a client who had a pretty good job in a MNC. His company benefits were really good because it not only gave him comprehensive medical coverage, it covered his family as well. Back then, he told me he was very happy with his insurance coverage and do not see the need to have further enhance his protection. 1 year later, he told me he changed his job and in exchange for a better monthly salary, his new company has a pretty limited insurance coverage. Hence, he became keen at looking into protection planning.
Here's the thing, this client of mine is lucky because his family and himself did not develop any pre-existing illnesses when he was working in his previous company. If any of them did, they may have exclusions, loading or even get declined when trying to purchase personal insurance after the job switch. Another oversight most people have is that company insurance also have pre-existing illnesses clauses which might exclude your coverage or have waiting periods for that condition when you join the new firm. So even if you decide to switch from company A to company B and both offers comprehensive insurance coverage, you might not be able to get the same coverage should you develop any pre-existing conditions.
Must conditions be severe to get substandard coverage? It really depends on your new company's insurer's risk assessment or the personal insurer you intend to apply with. So if you are solely relying on your company's insurance protection, does that mean you wouldn't ever consider a job change if you develop some pre-existing medical issues?
2. How definite are you that you wouldn't lose your job if you fall sick?
The whole idea of why people think company insurance is sufficient is because they assume that they will keep their jobs even when they are sick. It's very rare that company benefits extends to people outside their employment. So imagine a scenario where you have a severe illness that might require you to go in and out of hospital or not enable you to perform your job at the same stress level, how long could you stay in employment?
Another possible consideration could also be that you are feeling unwell due to your illness and your employers further load you with work because it's 'urgent' and your salary is taking up the headcount. If you need the coverage to pay your medical bills and the salary because you got no personal insurance, you cannot quit no matter how unhappy or unwell you are. Why would you want to put yourself in this situation?
Most company insurance cover your medical bills. What if there was an accident and you got disabled or bed-ridden and is no longer able to go to work? At best, the company gives you a golden handshake and maybe a bit of money. Once out of employment you will lose your company insurance coverage. Without coverage that covers disability, total permanent disability, hospitalisation and a payout, what would you do for your loss of income and any future medical bills?
3. Do you need protection for your old age?
So many times, when we are young we rely on company insurance. Say we are lucky and nothing happens to us during our working years, surely we intend to retire? The most common medical cost incurred at old age is hospitalisation and after-care costs. If you are still healthy, you will be able to buy personal insurance. The costs at a retiree entry age is very hefty though. Are you prepared to pay that yearly cost when you are retired?
Maybe we got some manageable illness during our working years and you have been using your company panel doctors to manage the cost. Some examples could have been diabetes and high cholesterol. Yes, these conditions are controllable with medication. You can go to work and go holidays. You keep your job till retirement. These conditions however may result in exclusions or decline in coverage when you try to apply for personal insurance when you stop work. What happens if new conditions surface in your later years due to wear and tear of the body? Would you be able to manage the cost on your own? Frankly as an advisor, out of 10 people I meet in their 30s, at least 7 have some minor medical condition to declare. How confident are you to be illness-free at retirement to purchase your insurance then?
A lot of times people will say stuff like when I'm old I do not need coverage. Just wait to die lor. Honestly, I share the same sentiments if it's a guarantee that I can die painless. However, what if you don't die? Would you want the most comfortable medical treatment and after care? When we are young and energetic, we may be able to rough out less favourable conditions. When we are old and weak, are you sure you want to suffer in less than favourable conditions simply because you have inferior or no protection coverage? Simple things like hiring a helper to help with the house chores or help you when you are less mobile. What about taking a taxi to your physiotherapy instead of public transport if stroke or accident happens?
4. How sure are you that your company coverage will not change?
Even if your company insurance protection is pretty good at the point of you joining them, they can change their coverage terms you know? Every year companies renew their group insurances and sometimes companies may change insurers to save cost or to increase benefits. For employees with no pre-existing conditions, this is not an issue. However, for employees with a past claim experience, some insurers have a clause to impose a waiting period or exclusion on that employee. Whether the company view the conditions as worthwhile or not compared to the cost savings or increased coverage is up to the company's HR. There are also instances where a company have been paying for comprehensive coverage and high claim limits for years only to reduce their coverage and lower their claim limits during an economic downtown.
How many people are aware of how comprehensive their company insurance is? How many people are on the ball to stay up to date with changes in their company insurance policies? Could there be this possibility where you thought you are comprehensively covered by your company insurance and decided to go without personal insurance only to discover that the coverage has been reduced a few years later and you need to pay a portion of your medical needs on your own?
Essentially, relying on company insurance takes control out of your hands. Whether you get good or bad coverage is dependent on the company's budget for staff benefits. The only way to ensure that you are adequately covered would be to get a personal insurance coverage because you are then the owner of the plan.
5. What is at stake if you do not have your personal insurance coverage?
A lot of people overlook this consideration. To me, this is the most important aspect of protection planning. Whether you need personal insurance or not is dependent on what is at stake without it. For instance, can your family survive and function as per usual financially if life takes you away from them prematurely? Would you be able to maintain your lifestyle, earn the same remuneration and enjoy the same meet ups with friends, holidays and family outings on weekends should you get a critical illness and even better still, recover from it? How sure are you that you can still manage a job of equal stress level with similar remuneration after your illness?
Are you willing to wipe out a portion of your savings for medical treatment assuming you need to seek treatment in an area where your company insurance does not cover you for? One example includes, seeking overseas medical treatment for complicated illnesses. Do you have a choice to stop work and forgo your current job to focus on recuperation? Can you still pay your bills if you need to go on no pay leave while recuperating in order to keep your job?
If any of your answer is no, I urge you to reconsider if you need personal insurance.
If you are wondering how to get started to protect yourself on top of your company insurance, please speak to a trusted advisor. You can drop me a message if you do not have a preferred advisor to work with. I am familiar with both personal and company insurance as I distribute both solutions and work with individuals as well as corporates. Distributing solutions from multiple insurers has it's advantages.
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Disclaimer: The content created are based on my personal opinions and may not be representative to everyone or any organisation. If you have any doubts or queries pertaining to insurance or investment, please seek professional advice from a trusted adviser in an official setting. You may also reach out to me if you do not have a present adviser using the message box under 'Let's Talk'.
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