Finance

How to Migrate from Your Employer’s Health Plan to an Individual Health Insurance Policy

Several employers offer group health coverage to employees. You may prefer this cover as the employer pays the premium. However, certain limitations may make this coverage insufficient. These include:

  • The sum insured is lower, as several employers customize group plans according to their budgetary constraints
  • The coverage does not continue once you resign or retire
  • The plan is inadequate to suit your health insurance needs

Even if you have coverage under a group health plan, you must still opt for an individual policy.  Here are five differences between these two types of health covers:

Individual Plan Group Plan
Sum insured As per your requirements Limited to the amount determined by employers
Period Renewable without limitations Ceases when you retire or quit the job
Premium You need to pay it; the amount depends on age, current health situation, and medical history The employer has to bear this cost, which depends on the financial situation
No-ClaimBonus (NCB) Available Not available
Waiting period Applicable as per policy terms The cover is available from day one

Although group medical insurance plans are cost-saving, choosing an affordable individual policy is a necessity. Individual plans allow you to select the sum insured according to your medical history and existing health scenario. Additionally, you have the flexibility of including your loved ones under a family floater policy. Moreover, you may opt for critical illness insurance based on your requirements to maximize the coverage.

How much coverage do you need?

The sum insured depends on several factors, such as your age, lifestyle, health situation, and family history. You must buy health insurance when you are younger. During this phase of life, you are healthy, and thus, can seek a higher coverage at an affordable premium. Additionally, for every year without a claim, you are eligible for an NCB, which helps increase the coverage over the years. Before finalizing on a policy, you must compare health insurance plans offered by different insurers to make the best choice.

Tax benefits on individual plans

An important advantage of an individual health plan is the tax deductions available under Section 80D of the Income Tax Act, 1961. These include:

  • If you and parents are below 60 years: INR 25,000
  • If you are below 60 and parents are over 60 in age: INR 50,000
  • If you and your parents are over 60 years: INR 100,000

Porting from group insurance to individual insurance

When you leave your job, you may port your mediclaim policy as per the regulatory guidelines. You may convert the group policy to an individual plan from the same insurance company. Afterone year, you may port the individual plan to another insurer if you are unsatisfied with your current provider.

When you port your policy, you do not lose the cashless health insurance and other benefits accumulated over the years. Port your group health plan to an individual policy today and avoid financial problems in the future.

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