Lucrative job offer with a better pay scale, or an opportunity to grow higher, whatever the reason may be, making a job switch requires a bit of planning. And planning your health insurance cover is an important step so that you aren’t left in the lurch during the transition. Quitting a job would mean, your employer would no longer include you in the company’s group health insurance plan.
Let’s look at a few important things you must know before you change a job, for a smother transition from one job to the other.
1) The notification period- Is your health covered?
The notification period, is that period from the time you officially submit your resignation till the time you are actually relieved. Mandated by most companies, this period ranges from one month to three months. Not having a health cover during this period would mean any medical expenditure would be borne entirely by you. Check to see if your company mediclaim policy covers you during this period, else, before entering into the notification period, ensure you make alternative arrangements.
2) Continuity of policy
When you quit your job, it is up to the company to allow a policy transfer to you as an individual policy or, whether to cease the cover. Many companies these days offer continuity of mediclaim policies even after retirement or quitting, by converting the employee group policy into a personal policy. The premiums though would be much higher, as the policy no longer falls under the purview of a group policy, but is now an individual one. You could ask if your company lets policy continuity.
3) Retirement and continued benefits
Here is something you should be aware of in case you are retiring. If you are retiring, continuity of your health policy comes with advantages, despite the high premiums. Getting a fresh policy, as you approach reqtirement could be a near impossible task. Higher the age the risk of pre existing diseases and lifestyle ailments are higher, thus making it difficult and expensive to get your self a health cover.
4) Pre-existing disease clause
Employers’ mediclaim plans are generally more lenient with pre-existing conditions. Group policies cover pre-existing conditions, which otherwise may not be covered under individual health policies. Quitting your job means, you would no longer be covered under their group policy and stand to lose out on the waiver of pre-existing disease waiting period. Personal health plans exclude pre-existing conditions during the first 1 to 4 years. It is thus wise to plan ahead and investing in an independent personal policy is surely worth it to avoid having to wait later for PEDs to be covered.
5) Restrictions in coverage
Company mediclaim policies offer tailor made benefits such as cover for senior citizen parents, family or maternity cover. Quitting your job would mean losing out on these extended benefits, till you get a plan to cover them. Besides, even if the company does allow continuity of plan into an individual plan, such tailor made benefits may not be extended.
6) Have a contingency fund in place
A contingency fund is an emergency fund that would act as a cushion, in case of an emergency, and it should be able to meet your expenses in case things are not fine. When you switch over your job, it may be a while before your salary may start ticking in. Or, a lag of a month or so may be there before you join your new company. In case you are starting your own new venture, your contingency fund should be at least 12 months of your expenses to handle the uncertainty involved. Prepare well in advance and build a buffer for unforeseen expenses.
Looking beyond your company mediclaim…
A very common thought amongst most of us is that company mediclaim is sufficient and further health cover is not really required. This is not true in entirety. Even though a company health plan may seem adequate, covering your entire family, it is always advisable to opt for a personal plan too. Here is why.
• In times of a job switch, when your company cover does not continues during the notice period, expenses are to be borne by you.
• In case you are quitting your job to begin a new venture, and go in for a fresh health cover, you would have to go through the waiting period of pre existing diseases.
• In times of retirement, getting a fresh policy may seem practically impossible
It is thus always better to go for that extra health cover when time and health is on your side. You never know when an emergency could strike.
Written By: Deepak Yohannan
The author is the CEO of MyInsuranceClub.com, an online insurance price & features comparison portal
For more articles by Deepak Yohannan, please visit MyInsuranceClub.com
You may contact him directly on Twitter: @dyohannan