Employer-Free Group Insurance Vs Personal Health Coverage: Which is Best for You Amid the Omicron Epidemic?

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While all types of health insurance plans protect policyholders against unexpected medical expenses, we’ll help you decide how to choose the right one.

The Covid-19 pandemic, for now, seems to be forever. From the first SARS-CoV-2 virus to the Delta variant and now the Omicron, efforts to normalize life still seem like a distant affair. The latest highly transmissible strain can evade some antibodies and immunity and has a higher, albeit slight, risk of reinfection than previous variants. In India, the effect of this variant has been immense, with more than 1.5 lakh cases reported every day.

This scenario has once again shed light on the importance of health insurance and how it has become a non-negotiable proposition for every individual. But the many options have people confused as to which one to buy, especially with the third wave in motion.

When looking for health insurance, you will come across individual health plan, corporate group insurance, and a combination of the two i.e. informal group insurance. While all protect policyholders against unexpected medical expenses, we’ll help you decide how you should choose the right one.

Know your package

Informal group insurance, also called non-employer-employee group insurance, is taken out collectively by people belonging to the same company, cultural association or even those who hold an account in the same bank. Any informal group such as users of a website, mobile application, etc. can also offer group insurance to its clients.

Alternatively, individual health insurance or retail insurance is a more formal method of obtaining health insurance coverage. It is an insurance package taken out by individuals for themselves or their family.

The main difference between individual health insurance and group health insurance is that individual health insurance is heavily regulated by IRDAI and the interests of policyholders are much more protected in individual policies than in group policies.

Renewability of the plan

The biggest differentiator of individual insurance policy and non-employer group insurance is renewability. The former benefit from lifetime renewal, whereas in the case of group insurance plans, long-term renewal is not an option.

In the informal group plan, the other uncertainty is that a particular product or policy that one had opted for may be discontinued or withdrawn by the bank or insurance company. The validity of the policy is subject to a specific set of terms and conditions. Also, if for any reason you have to leave the group or decide to change your current active bank account to the same bank, your group policy will no longer be valid. In contrast, an individual policy is permanent until you change or cancel it. So, opt for a personal policy that also covers consumables, which in this era of Covid-19 has risen to 20-30% in the total hospital bill and additional coverage to choose from.

Police premium

As mentioned earlier, under individual health plans, pricing is strictly controlled by IRDAI guidelines. However, in informal group plans, the pricing can be flexible and be determined according to the cumulative preconditions of the group, i.e. if necessary, modifying them is possible. It is therefore essential to consider this factor before choosing your preferred health policy. There have been instances of complaints being raised, especially by older people, that their group policy premiums have also increased by 2x or 3x. Such conditions never occur in individual policies as they are closely monitored by IRDAI.

Consider the pros and cons

Covid-19 cases are already seeing a massive increase in India, and Omicron is expected to engulf even more people during the peak. Opting for an insurance plan, whether collective or individual, is therefore an integral part.

Individual plans alternatively offer worry-free continuity, flexibility, high sum assured, included health checkups and keep good control even during medical inflation, which is essential especially in times of Covid-19. They also offer adequate coverage and choice endorsements, have no dependence on the bank or association with any group. In addition, it gives better control and allows selection factors such as claims settlement rate, wellness benefits, OPD coverage, consumables, hospital network, among others.

(By Amit Chhabra, Head of Health and Term Life Insurance, Policybazaar.com)

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