Updated: January 5, 2022 6:13:44 pm
Written by Amit Chhabra
We all have been collectively wading through grueling times since the onset of Covid-19. Just as the plunge in the number of cases came as a much-needed respite, the fresh outbreak of the new variant Omicron seems to be setting the records askew once again. The new strain, which has been classified as a variant of concern by the WHO, is now present in over 77 countries and is spreading further at a rapid pace in India. The current situation has rendered the possibility of not having health insurance null, and instead, compelled us to weigh different options available before choosing the best one.
While there are a lot of options available when it comes to health insurance, one ought to be extra cautious at a time when the possibility of a third Covid wave seems to be stronger. There are individual health plans, corporate group insurance and a mix of both – informal group insurance. This informal group insurance is also known as non-employer-employee group insurance, is collectively purchased by members who might belong to the same society, cultural association or hold an account in the same bank. These insurance schemes are offered by most private and public sector banks. For the past few years, the guidelines have allowed banks to partner with 3 insurers in the life, general and health segment and offer policies to customers.
If you are mulling over which option to choose during these times, consider these comparison points.
Compare the coverage
Usually, the decision of the extent of coverage in group insurance rests with the insurance company. Also, there’s a standardized coverage that applies to all group members. So all members have an equal amount of sum insured, no matter their age, position or economic status. However, in some cases, customers might also be allowed to choose the amount of coverage. But their choice is again limited to the available options only. These plans could be a viable option if all members have similar demographics, financial backgrounds and health conditions. They can, therefore, reach a consensus to opt for a plan that suits them all.
On the other hand, individual health insurance offers a wider range of flexibility and control when it comes to the sum insured. You could opt for the sum insured that best suits your requirement. Amid the new Covid variant spreading like wildfire, it makes sense to have sufficient coverage and more control over your policy. In case, you want higher coverage in uncertain times like these, you could get coverage of up to Rs 1 crore at a reasonable premium of around Rs 1200 per month. You can also attach optional riders at an extra premium as per your needs.
Consider the renewability of your plan
The biggest advantage that an individual insurance policy enjoys over non-employer group insurance is lifelong renewability. Individual health plans can be renewed for as long as the policyholder lives and wishes to continue with the insurance. Talking about informal group policy, there are a few uncertainties associated. They are not lifelong renewable. The bank or the insurer might decide to withdraw or shut down a particular product or policy that one had opted for.
Pricing of the policy
The pricing of individual health plans is more strictly and closely guarded by the IRDAI guidelines. Informal group plans have better flexibility to decide the pricing of the policy as per the cumulative requirements of the group. This means that it could also lead to a change in pricing if required. You need to keep these factors in mind before you decide.
Flexibility and customization of policy
These group policies are purchased by a single member or group owner on behalf of other members. This might again allow little room for flexibility in case individual members want to customise their own policies. As we know, we are all going through unprecedented times and it’s best to have absolute control over your insurance policy. For instance, if due to some reason, you need to exit the group, your policy will end too. Similarly, if you no longer have an active bank account in the same bank as your group policy, your policy will also no longer be valid.
Also, given the Covid times, the cost of consumables has risen to 20-30 per cent in the total hospital bill. Your individual policy allows you to add consumables cover and other benefits to suit your own individual requirement which might greatly differ from your group’s requirements.
Consider the pros and cons of both
Both the policies are different in nature but at the end of the day, both are designed to shield you against a medical emergency. It’s best to weigh the benefits of both before you choose. Talking about group insurance, it can be bought at a lower premium. It also doesn’t require a medical check-up before buying the policy. Since you’ll be paying your premium, therefore, same tax benefits apply as an individual policy. But on the downside, it is less flexible in terms of coverage and other additional benefits. You also can’t opt for a higher sum insured which is crucial in these times. Also, standard benefits apply to all members. It can be a good option for small companies looking to meet budgetary expectations alongside providing coverage to a group of employees.
But when we talk of individual health needs, an individual health plan works best. Even as we brace up to battle the new variant of Covid, we must remember the exorbitant medical bills and towering inflation. An individual health insurance policy provides you with adequate coverage and riders of your choice. There’s no dependency on association with a group or a bank. You exercise better control and can choose keeping certain factors in mind, like the claim settlement ratio, wellness benefits, OPD coverage, consumables, the network of hospitals among others.
The author is Head-Health Insurance at Policybazaar.com. Views expressed are that of the author.
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