Converting the group health insurance policy to an individual cover policy is a smart move for those facing a career transition or retirement. It will ensure continued coverage, protect against pre-existing diseases and safeguard from the financial risk of coverage gap.
The individual can increase the sum insured, include riders like outpatient department (OPD) cover and add a super top-up for a comprehensive cover. Converting the cover will prevent the individual from the hassles of undergoing medical screening and start a fresh waiting period, typically two to four years, for any chronic conditions like diabetes, hypertension, etc.
How to convert ?
The individual must apply to the insurer at least 30 days before the date of expiry of the group policy. He can select a specific individual or family floater indemnity plan offered by the same insurer. The customer must ensure the immediate coverage under the new retail policy.
Siddharth Singhal, business head, Health Insurance, Policybazaar.com, says after submitting the required migration documents and paying the first premium, the applicant is eligible for the new individual policy. “All family members (self, spouse and dependent children) who were covered under the employer’s plan can apply for migration to an individual retail indemnity policy,” he says.
Waiting period covered
Most insurers will honour the coverage periods for waiting periods as long as it is done with no gap when switching from a group policy to an individual policy. Also, all the benefits accrued in the group policy will get transferred to the new individual policy. Sarita Joshi, head, Health and Life Insurance, Probus, says the specifics will differ between insurers and policy conditions. “So it is the policyholder’s responsibility to confirm with the insurer prior to switching,” she says.
Fixing the premium
After approval for a migration request is received, the insurer will assess the premium based on the factors including the individual’s age, health status, sum insured, addition of super-top up or riders such as OPD cover, critical illness rider, etc.
Individual premiums would be assessed by the insurer at a higher price as compared with a group policy premium. This is due to risk classification with a retail policy as compared to risk pooling associated with a group policy cover.
The premiums of group policies are lower during employment years. However, the premiums rise once an employee retires or transitions to a new job. Older ages and pre-existing conditions would push up the retail premium. Once the individual policy has been issued, the insurer cannot deny renewal based on the health of the insured or his family members. This will ensure continued cover and transparency for the policyholder.