This is a common question about group insurance schemes. “I am provided with a group insurance and group H&S (Hospitalization and Surgery) scheme by my employer. Isn’t that sufficient to cover me?”

Group insurance is usually given as a basic cover by employers. Employers give such benefits to attract and retain staff. Also it is better to incur some expenses in order to pay for injuries, disability or death when something happens, rather than the employees come asking for money when they can’t pay.

The disadvantage of group schemes is they don’t cover you the moment you leave the company. When you are in between jobs, you have no cover at all. Group insurance schemes tend to be less comprehensive and the amount of cover is usually much lower. For example it is quite common to have cover of around RM 15,000 for hospitalization per annum. Nowadays, an simple appendix operation can cost around RM 7,000. If you are stuck with something more serious, the amount of cover will be used up very fast. There are some industries like Oil and Gas, telecommunications and banking that may give very good benefits to the staff.  However, once you leave or retire, you benefits will stop.

In a downturn when business is not good, some companies may also reduce benefits to cut cost. Group insurance benefits are among the benefits that get cut too. Consider group insurance schemes as bonus from your employer but don’t count on it too much. It is better to have something within your control. The problems with insurance is as we get older, our health deteriorates. You may suffer from an illness that prevent you from buying insurance later in life. This is especially so for hospitalisation and surgery insurance.