Many people feel that the coverage their employer provides under the company’s group insurance scheme is sufficient. But group cover at a work place has more to do with the employer’s obligation and less with individual needs. You may find yourself without insurance cover if you retire or are between jobs. Therefore, it’s best to treat individual coverage separately without considering the group cover. Some glaring differences between group cover and individual protection are:

Health insurance : In the area of health cover, what an employer would normally do is to take a plain vanilla cover of a blanket group product.

While the cost of the policy in such a case would be low, there may not be enough cover for individual needs. There is also no scope for customisation — no cover for critical illness, cost of hospitalisation and treatment – all these usually go much higher than the base coverage.

Loans : Very often, life insurance covers are used as collateral for loans. Banks and financial institutions use these to judge your networth too. No such things are available with a group cover.

Riders: Even on pure term covers taken on individual lives, you have an array of additional policy riders that make the protection really meaningful.

For instance, you have riders such as disability benefit, accident double cover, critical illness cover, waiver of premium, family monthly income benefit cover, covers for specific diseases, such as cancer, and so on. These don’t cost much either, but are available only on individual policies.

Longer period benefits : If one relies just on a group cover and goes for an individual protection only when employment ceases, the cost of the insurance can be very high. This apart, because of the advanced age, it may attract some restrictions or extra premium. A long-duration pure term individual cover becomes even more handy at advanced ages. These days, riders can also be tailor-made to suit your specific needs.

The writer is Distribution Officer, AEGON Religare Life Insurance

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