Things to note when porting a group health insurance policy to an individual policy

• Premiums as low as Rs12/day for coverage of Rs.4 Lakhs*
• 10,000+ hospitals for cashless treatment
• Claim up to Rs. 55,000 deduction under section 80D**

Group health insurance offered by an employer has its own set of advantages especially if you cannot afford to pay premiums on your own. However, most financial planners suggest that it is absolutely necessary for working professionals to have their own individual health insurance plan. In terms of benefits offered, a group health insurance policy may do the job of providing financial security against medical threats. However, the option to customize is extremely limited in group health insurance policies.

Health insurance companies now allow policyholders to convert their group health insurance plan into an individual one with the help of the portability option. Instead of buying an entirely new cover, you can simply convert your group policy without losing out on the accumulated benefits. If you wish to make this change, you can contact the customer service of your health insurer and ask them about the process.

What are the advantages?

Converting your group health insurance policy to an individual policy makes sense in a lot of ways. The advantages of conversion can be listed as follows:

• Flexibility: In an individual health insurance policy, you can have a lot of flexibility that you did not have in a group health insurance cover. For instance, you can increase or decrease the sum insured amount at the time of renewal. You can also add some rider covers to enhance your protection. All these options are not available in group health insurance policies.
• No claim bonus: In group health insurance, you do not get any no claim bonus for not making any claims during a policy year. The cumulative bonus available in individual or family floater policies can be used to enhance the sum insured amount and maximize your protection.
• Restrictions: An employer-provided cover may have certain restrictions with respect to the type of coverage that can be availed. For instance, most employers do not provide coverage for the parents of the insured person. If you wish to add your parents in your health insurance coverage, you can do so by converting it into an individual or family floater health insurance plan.
• Level of coverage: Since group mediclaim policies cover a lot of people in an organisation, employers typically go for cheaper plans that may not have the same level of coverage. When you convert your policy to an individual policy, you can customize it at your will and enhance the level of coverage.
• Applicability: Group health insurance policies are valid only as long as you are employed. The moment you leave the company, your coverage stops and you have to pay for your medical expenses on your own. With an individual policy, you can have better control in terms of applicability. An individual or family floater policy remains active as long as you pay the premiums for a policy year.

Limitations of an individual health insurance plan

Though an individual policy gives you more control, you may have to face certain limitations with regard to cost and waiting period. The disadvantages that you might face during this conversion process can be given as follows:

• Cost of the policy: This is the most obvious disadvantage of porting your group policy to an individual plan. Group plans are typically cheap, and employers typically get a good deal when they cover all their employees. This discount may not be available when you make the conversion. Also, you may have to pay extra if you decide to enhance the level of coverage you have.
• Waiting period: Group health insurance plans typically do not have any waiting period. All conditions and pre-existing illnesses are covered from day one. If you are converting your policy to an individual plan, you may have to adhere to the waiting period criteria of the policy.
• Possibility of rejection: In individual insurance policies, the acceptance of a policy application is based on the discretion of the insurer. In certain cases, an individual may get rejected by the insurer due to existing conditions or family medical history. Since group policies provide coverage even for existing conditions, the possibility of rejection is very minimal history.

Conclusion

Individual health insurance provides you more control over how you should be covered by a mediclaim policy. However, you may face restrictions if you have many existing health conditions or family medical history. The cost of insurance could be higher when you opt for an individual cover. If you cannot afford to pay the premiums, it is better to stick to the insurance cover offered by the employer. Group health insurance policies provide coverage as long as you are the employee of a particular company. It is better to make the conversion if you prefer to customize your health insurance cover and affordability is not an issue.