It is important to choose one’s health cover wisely, else it can drain one's money without providing any adequate protection.

While the COVID pandemic caused great disruption in the lives of people, experts believe at the same time it has also laid great emphasis on the importance of health insurance. Health insurance acts as a protection tool that helps in safeguarding people’s financial health in times of need. However, it is important to choose one’s health cover wisely, else it can drain one’s money without providing any adequate protection.

People covered by their employers, often feel that the group insurance cover they have is good enough and they do not need their own individual or personal coverage. While many feel it is important to have individual or personal coverage but don’t have clear answers to ‘why’.

Bhabtosh Mishra, Director Underwriting, Products & Claims, Max Bupa Health Insurance says, “Employer-provided group health coverage are subject to change. The company decides on the benefit design based on various considerations like budget, employee demography, etc. Group coverages also are re-priced every year based on claim experience and other factors.” It is usual, thus for companies to introduce restrictions, premium sharing etc over a period of time. One loses the coverage or the coverage changes on loss or change of jobs.

On the other hand, retail personal health insurance policies coverages continue to enhance with cumulative bonus, waiver of the waiting period and exclusions, etc. over the years and provide protection to an individual and the family irrespective of where he/she works and provides coverage even after the person stops working. Mishra, adds “Retail health policies also offer premium stability in comparison to group policy since group policy, as explained is subject to a price change every year.”

How does it benefit an individual and his/her family?

One of the essential factors for which you need to consider having an individual health policy along with your group health policy is – the coverage and the sum insured of your group insurance. Rakesh Goyal, Director Probus Insurance says, “These could be vital factors as the group policy might not offer you the required coverage or the sum insured since the policies are designed as per the employer’s will and the policies of the organization.”

Additionally, experts say one should keep in mind that a group insurance policy remains active only till the time the policyholder is associated with that particular company. Once he/she switches jobs, the previous employer’s policy will no longer be valid. Hence, Goyal says, “under unfortunate situations wherein one loses his/her job or think of taking a break, not having an individual health policy during a medical emergency can lead to a financial crisis.”

An Individual plan gives a person the option to choose from a host of benefits, providing great flexibility and customisation. The policyholder has complete control over the coverage amount, specific diseases to be covered, etc. An individual plan stays with you even if you switch job. In the case of an individual plan, a person can continue to get health insurance cover for himself and his family even after his retirement.

There are also insurance policies in the market that offer customization of a health insurance product depending on a customer’s need such as plans which covers non-payable items as well and offers benefits allowing unlimited sum insured wherein the policyholder can claim for any illness or any family member covered for as many numbers of times as they want, during a policy year.

On the contrary, experts say having an individual policy handy along with a group health policy could give a policyholder an overall cover. The mix of an individual policy along with a group health policy comes with its own sets of benefits. For instance, if you fall ill or suffer from any critical illness that may demand huge medical expenses – in that case, you can use the benefits of both groups as well as individual policy and get your medical expenses claimed without paying from your pockets.

Hence, group health insurance policy comes with its own sets of pros and cons. A vital factor that should be considered is, it is quite difficult to opt for an individual health insurance policy after retirement. So if you are thinking of opting for a health insurance plan post your employment period/retirement, it would cost you high premium rates.

Here are some of the shortcomings of a group health policy;

• The premium amount for all the employees is constant irrespective of their age, position, gender, medical condition, etc.
• Family protection depends on the employers. Some companies offer family protection while others don’t. Also, few companies provide this protection on additional premiums.
• The employer can choose to discontinue the policy anytime. Goyal adds, “This might be risky for the employees during emergencies if they do not possess any other health insurance plan.”
• It can be a loss for the employees while leaving the organization as they wouldn’t be insured unless they join any other organization that provides any group health policy.
• Group plans are not valid for a retired person, and hence, a retired individual could suffer from financial expenses if they do not have any existing health insurance plan.
• The amount of coverage may be altered anytime with the changing policies of the company. This could be a loss for the employees if the amount of coverage decreases.