Most of us focus on the employee perks and paid leave when we’re just starting out in our careers. In spite of this, we neglect to take a closer look at the most important benefit—company insurance. Also known as group employee insurance, it is typically included in your employee benefits and provides coverage to assist you manage medical expenses.
Free insurance seems great, especially if you haven’t purchased your own personal insurance plans yet like someone who has just entered the workforce. While it’s true that you may save money by opting into your company’s insurance policy, you should know that there are other factors to take into consideration. You’ll need to evaluate the following:
- Is my company’s insurance policy enough?
- Do I need personal insurance?
- How much of each type of coverage do I need?
- What benefits does my company provide that aren’t included in the insurance?
It’s interesting how many people I talk to who have never considered or even thought of purchasing their own insurance. They’re so used to having the company insurance, which they get with their job, that they’ve never questioned whether or not it’s sufficient, and if it is, how much coverage do they really need?
The company insurance that you receive with your job is known as a “secondary” policy. This means that the policy is secondary to your personal one in the case of an accident or something else that needs medical treatment. The basic idea behind secondary insurance is that your company will pay for medical costs up to a certain amount. However, it’s still subject to some limitations: you would still need your personal policy to pay for the extra expenses. In some cases, depending on what your company’s policy offers, this could mean up to 100 percent of the costs being covered by your company insurance policy.
Employee benefits packages can be extremely valuable to the employee—particularly if they’re not quite ready or able to take on the responsibility of purchasing health insurance on their own. Many companies also offer other types of benefits such as dental insurance and life insurance, though not all do. If a company offers group insurance, it’s likely because it’s extremely beneficial for the employer: in addition to providing an incentive and a benefit for employees, it allows companies to avoid administrative costs of setting up and maintaining individual policies for their employees.
This doesn’t mean that you can ignore your personal insurance—in fact, it’s extremely important to have a strong personal plan in place. First off, if you don’t have any personal insurance at all, there’s no chance that you’ll be able to get any at all because you won’t be able to prove good enough health. Having a strong plan can also help you out when it comes time for hospital expenses.
How Does Company Insurance Work?
In most cases, company insurance is part of an employee’s compensation package at most companies. Benefits can range from basic health insurance to reimbursements for medical and dental expenses, critical illness insurance, and more, depending on the organization.
The benefits offered by a company’s insurance plan can be also utilized to recruit and retain employees. Comprehensive insurance can make a tremendous difference in the rising cost of healthcare, especially if your company insurance covers your dependents. What a relief it will be to know that your medical expenses or those of a loved one will be covered by your company’s employee benefit plan?
Company insurance, on the other hand, is usually offered as a package. Some companies may offer various benefits to employees based on their position or age, such as greater benefit limits for higher-ranking employees or a larger allowance for health tests for elderly employees.
However, the benefits are bundled, and group insurance was created for the most common needs of groups, as its name implies. In the end, there will be a protection gap because it doesn’t tailor to your personal needs on an individual basis.
Because of this, it is essential that you have enough personal insurance coverage in place. Additionally, having your own personal insurance means that you’ll have a backup plan in place should you lose your employment and the insurance that comes with it.
Types of Business Insurance and The Coverage They Provide
A company’s insurance policies can typically be divided into two types: those that are portable and those that are not. When comparing company insurance to personal insurance, we’ll take a closer look at the kinds of company insurance, what they can do for you and their limitations.
Portable Insurance
These plans are those that you can keep even if you leave the company.
Included here are:
Portable Medical Benefits Scheme (PMBS)
Employees who have Portable Medical Benefits Scheme (PMBS) get additional contributions to their MediSave account from their employers, which they can use to pay for their MediShield Life and Integrated Shield Plan (IP) premiums, along with ElderShield or CareShield Life supplements. As a result, you’ll be able to choose the level of medical insurance coverage you want, and you’ll also be able to keep it even if you switch employers.
Transferable Medical Insurance Scheme (TMIS)
This is an advanced group hospitalization and surgical insurance that provides you with extended inpatient coverage of up to 12 months when you are in between employment. All of your benefits, including coverage for pre-existing conditions, will be carried over to your new job if it is part of the same scheme.
Shield Plan
This option provides inpatient medical benefits via MediShield Life or an IP, which your employer pays the premiums for, as long as you are employed. Direct payments to the insurance company, cash reimbursements, or MediSave contributions can all be used to pay for medical bills.
Employees benefit greatly from portable insurance policies that can be transferred and which the coverage can be extended. However, because they are more expensive and need more labor to administer, this is not popular in Singaporean companies.
Non-portable Insurance
Group Term Life and Group Medical and Hospitalization Insurance are the most frequent types of non-portable company insurance. In order for you to attain these, you must be employed in a company.
Group Term Life
This type of insurance covers death and total and permanent disability (TPD) and is normally accessible as an opt-in, where you pay your own premiums, but at a lower rate.
Group Medical and Hospitalization Insurance
If you work for a company that allows you to pay a higher premium for additional benefits, you may be able to extend your medical insurance coverage to your family members.
Non-portable group insurance has its own set of limits, so it’s important to keep this in mind.
The Drawbacks of Having Non-Portable Company Insurance
Non-portable plans are an example of where you get what you pay for. Do you have a pre-existing condition that requires additional insurance or coverage? Would you prefer to be in a Class A ward if you were to go to the hospital?
If you have a non-portable employer insurance policy, your coverage, co-payments and hospital ward entitlement will often be set in stone.
While you may be offered a variety of coverage options by some companies, ultimately you must choose from what they have to provide rather than from what you require.
You’ll have the biggest problem of all when you leave your job because your insurance coverage expires when you do. In view of the increasing number of people switching professions, whether deliberately or not, having adequate personal insurance is more necessary than ever.
You’ll be able to avoid becoming uninsured for illnesses you get while unemployed if you take this step.
But what if my company’s insurance and my personal insurance overlap? you may wonder. Being over-insured is preferable to being under-insured. Instead of just relying on company insurance, buy enough personal insurance to bridge the protection gap.
The Best Personal Insurance Policies to Purchase
Looking for ways to increase your personal insurance coverage but have no idea where to begin? With these four essential policies in place, you’ll be well on your way to a secure financial future.
Health Insurance
Huge medical expenditures can be paid for in part by health insurance. Health insurance plans like Great CareShield and your MediShield Life are two examples.
Life Insurance
Life insurance, on the other hand, provides security for you and your loved ones against the unforeseeable occurrences of life. For instance, Great Life Insurance covers you against death, total and permanent disability, terminal illness, as well as future unknown diseases like COVID-1902.
Personal Accident Insurance
If you’re always on the go, have a job that places you at an increased risk of accidents, or simply lead an active lifestyle, consider adding personal accident insurance to your repertoire.
As soon as you’ve taken steps to protect yourself, you may turn your attention to reaching your financial objectives. Whatever your financial goals are—saving for your child’s college tuition or planning for your own retirement—saving and investing programs can help.
Enhance your Company Insurance By Adding Personal Insurance Coverage
When company insurance delivers the coverage you need, it can be a great choice. It’s rare that you may pick and choose the level and type of security you receive. If you only rely on the insurance provided by your employer, you run the risk of being underinsured or stranded in the future.
For these reasons, it’s a good idea to begin constructing a personal insurance portfolio that is tailored to your specific needs and financial objectives. Looking for some guidance? Get in touch with one of our helpful representatives today!