Covered by group insurance? You still need an individual health plan

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Published: May 17, 2019 12:09:13 AM

If you are relying on your group health insurance and plan to buy a cover after retirement, it will not only be expensive but insurers may reject your case on medical grounds

A group health plan offers healthcare coverage to the employee, spouse, dependent parents and dependent children up to a certain age. (Illustration: Shyam Kumar Prasad)A group health plan offers healthcare coverage to the employee, spouse, dependent parents and dependent children up to a certain age. (Illustration: Shyam Kumar Prasad)

While many employees may be covered under a group health insurance scheme, one should buy an individual health policy at an early age. That will not only come cheap but will also cover the exclusion period when one is healthy.

A group health plan offers healthcare coverage to the employee, spouse, dependent parents and dependent children up to a certain age. The terms and conditions, inclusions as well as exclusions are same for every individual covered by the policy. As an individual, it is not possible to voluntarily opt for a group health plan.

Exclusions, waiting period
In group health insurance, one does not have to submit any medical reports, there is no waiting period and there is full coverage for any pre-existing conditions. However, an individual health insurance cover will have exclusions and waiting periods which are typically for four years. So, insurers will cover pre-existing ailments after four years of continuous coverage.

A group policy will no longer be valid if the individual resigns from the organisation or retires. As per the insurance regulator’s rules, insurers have to give the policyholder the option to migrate from the group policy to an individual or family floater cover after paying an extra premium. If an individual exits his group plan and buys an individual policy, then the waiting period will start afresh. In such a case, he and his family will be at a risk if he does not have the group policy and is still under his new policy’s waiting period.

A group health insurance cover can be customised according to the requirement of the group. But in case of an individual policy, customisation is not possible.

Expensive cover
Premium for health insurance increases sharply when an individual is more than 45 years old. So, as a golden rule buy health and life insurance when you are young and healthy. As you grow older, insurers may insist on a medical test. So, if you rely on your group insurance policy till retirement and plan to buy a cover after retirement, it will not only be very expensive but insurers may reject your case on medical grounds.

All group insurance policies have limitations in terms of coverage amount which may be out of sync with rising healthcare costs. In order to provide greater coverage and more benefits under a group plan, your employer may need to pay higher premium costs. So, it is always better to get over these limitations personally, by taking an individual health insurance policy with adequate coverage and features as per your needs.

Analysts say one must look at a basic product that covers all the members of the family. At present, all health insurance policies provide for entry age of up to 65 years and do not have any exit age once the proposal is accepted, provided the policy is continuously renewed without any breaks. Health insurers cannot load charges on an individual insurance policy at the time of renewal, even if the policyholder has made a claim in the policy year.

Treatment-wise limit
There is no treatment-wise limit in a group health insurance policy but an individual policy will have such limits. If the claim amount exceeds the amount set by the insurer in an individual policy, one has to pay the balance despite having a bigger policy cover. There are health insurance policies that provide daily cash benefit for each day of hospitalisation. One must also note the terms and conditions of pre- and post-hospitalisation offerings, no-claim bonus and waiting period for specified ailments, vary from company to company.

While buying an individual policy, one must ensure that the cumulative bonus is stated explicitly in the prospectus and even in the policy document. In case of any pre-insurance health check-up of the policyholder, half of the cost will have to be paid by the company, provided the proposal is accepted and results in a policy. Policyholders with multiple health covers can claim from multiple insurers if the benefits covered are fixed in nature.

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