In today’s uncertain world, sufficient health insurance is needed now more than ever. Even though insurers and most employers offer this kind of coverage under their benefits package, one still may not depend fully on group health insurance. Instead, purchasing an individual health insurance policy can give you better and more reliable protection. This article illustrates some reasons why purchasing an individual health plan can make more sense.
What is Group Health Insurance?
Group health insurance is a type of medical coverage for an organization, employer, or any other set group to present to its employees or enrolled members. Normally, the premium is catered to by the employer or the group, while the package is characterized by an employee’s immediate family. Still, there are some limitations attached to group health. There are certain limits to group health plans, though these are a design for basic coverage; hence, not everyone’s needs will be met.
Advantages of Group Health Insurance
Before understanding the advantages that an individual health insurance policy has, it becomes imperative to first look at the benefits of having group health insurance:
- No Premium Costs: The employer pays the premium, making it a cost-effective option for the employee.
- Family Coverage: This plan generally covers the employee, spouse, children, and sometimes parents.
- Immediate Coverage: Normally, there is no waiting period for coverage to be activated, hence it starts right from day one.
- No Medical Tests Required: Group insurance plans usually do not require a person to go through medical checkups beforehand for enrollment in their programs.
- Coverage of Pre-existing Conditions: Pre-existing conditions are usually covered from the outset.
These notwithstanding, there nevertheless are a number of reasons that make depending entirely on a group health insurance plan not enough.
Limitations of Group Health Insurance
While there are several pros related to group health insurance plans, some associated cons exist, too:
- Coverage is Tied to Employment: This is the single most significant drawback. Your coverage is contingent upon your employment. Should you leave your job, your health insurance goes too, and by this token, it may put a person in jeopardy during times of switching jobs or periods of unemployment.
- Limited Sum Insured: Generally, in a group health policy, the sum insured will be limited to ₹2 to ₹3 lakhs maximum. This will not be enough because the costs of treatments are skyrocketing, and in times of serious illnesses or emergencies it might fall short of an adequate amount of coverage.
- Rigidity: Because a group health insurance plan is designed by an employer, there is either little or no room for an employee’s voice in deciding the terms or coverage, or even the benefits and services of the cover. The policy details may change at the whim of the employer—very likely against your interests.
- No Post-Retirement Coverage: Most of the group health plans will extend up until you reach your retirement age, but beyond that tenure, it will be discontinued. It’s highly adverse and rather expensive to buy a new policy at this age due to associated risks from old age or other pre-existing health complications.
- No Tax Benefits: The premium paid by the employer for group health insurance, in comparison with individual insurance, does not have any tax benefits for the employee.
Keeping in view these limitations, most persons choose to avail an individual health insurance plan that ensures wider and more consistent coverage.
Why You Should Consider Individual Health Insurance
- Continuous Coverage: Individual plans of health insurance provide you with coverage not associated with your work. Hence, you remain covered in case you leave your job, take a break from your career, or even in case of retirement.
- Customizable Plans: The best part about an individual health plan is getting a choice for opting for the sum assured, add-ons, and other benefits at your behest. You can choose a policy that fits your pocket and health needs.
- Higher Coverage: The coverage in the individual plans is most of the time higher in number than the coverage in group plans, meaning you and your family are better protected should a big health problem come about.
- Lifetime Renewability: Most individual health insurance policies carry lifetime renewability, ensuring your coverage as long as you live and most need it in old age.
- No Claim Bonus (NCB): Many IP plans give a No Claim Bonus that increases the sum insured for each year of no claim. It can be additional financial protection at no extra cost to you.
- Tax Benefits: Premiums paid towards individual health insurance are deductible in the taxable income under section 80D of the Income Tax Act, 1961, thereby helping in saving money with health protection.
Conclusion
Though group medical insurance is presented with some frills and offers partial coverage, it is usually not competent and almost never sufficient to meet the complete health needs of you and your family as required. Individual health insurance provides flexibility, higher coverage, and security on a long-term basis, which any group plan cannot. Therefore, to protect yourself absolutely against those unexpected medical expenses, a personal health insurance policy would be prudent alongside the employer-provided group plan.
You can protect your financial future, have tax benefits, and be at peace even in adversity with an individual health insurance policy that will cover you and your loved ones through any situation. Don’t allow it to be too late; find your options today and choose what is best for you.
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Disclaimer – This article is for educational purposes only and by no means intends to substitute expert guidance. Mutual fund investments are subject to market risks. Please read all scheme-related documents carefully before investing.
