For those working in the corporate setting, health insurance offered by their employer is more than a mere perk. We live in a time where medical inflation is at an all-time high, and it is only set to climb higher in the years to come. This makes medical insurance policies an absolute necessity. Some employees may solely depend on the health insurance provided by their employers for themselves and their family members. Most employers get a standard group/corporate insurance to cover the needs of their employees. But as one grows older, an individual health insurance policy may be more suitable, especially for those in senior roles.
Here’s a deep dive into both these plans to help you understand how they work and how they can be beneficial to you in any given circumstance.
What is a group/corporate health insurance plan?
This plan is issued to employers and offers coverage for the employees under them. In some cases, coverage is extended to the employee’s dependents as well. The coverage lasts till such time the employee is part of the organisation. The premium can either be covered by the employer or sometimes may be deducted from the employee’s salary. Some plans can be customised with add-ons and top-ups for an additional premium but this is rare.
What is an individual health insurance plan?
An individual health insurance plan offers coverage only to the individual policyholder. Coverage can’t be extended to the policyholder’s family members or others. Premiums are paid by the individual. A wider range of customisations in the form of add-ons is available for the policyholder to choose from. This ensures that the policyholder gets a personalised healthcare plan.
Here are some of the key differences between corporate and individual health insurance plans
1. Coverage: A corporate health insurance plan will offer a basic level of coverage for every employee under the organisation. Often this coverage can be limited, as the sum insured may not be much to begin with. And if it is extended to the family members, the sum insured may run out depending on everyone’s health needs for that year. An individual plan doesn’t have such limitations. You can opt for a high sum insured and even buy 1 crore health insurance, which can offer an incredible amount of coverage for senior executives.
2. Personalisation: Corporate health insurance plans usually can’t be customised to meet all the health needs of each and every employee. In very rare instances, limited top-ups and add-ons may be offered to employees for an additional premium. But with an individual health insurance plan, senior executives will be able to customise their plans to suit their health needs.
3. Pre-existing conditions: Corporate health insurance plans usually cover pre-existing conditions from day 1. Individual health insurance plans have a waiting period of 1 to 4 years for pre-existing conditions.
4. Maternity benefits: Much like pre-existing conditions, maternity benefits are offered with no waiting period under group health insurance. With an individual health insurance policy, maternity benefits may be available after 9 months to 2 years. Depending on the insurer, an add-on to avail maternity benefits can be added to the individual plan for an additional premium.
5. Tax benefits: If the premium for the corporate health insurance is paid by the employer, the employee cannot claim tax benefits under section 80 D of the Income Tax Act. Individuals can claim tax benefits if they have availed an individual health insurance plan.
6. Pre-medical health checkups: A pre-medical health checkup is not a prerequisite for a group health insurance plan. But for individual health insurance, depending on the age of the senior executive, a mandatory pre-medical health checkup may be required by the insurer.
7. No claim bonus: A no claim bonus is a benefit that is offered when a claim is not made within a particular policy period. The insurer will either reduce the premium or increase the sum insured without increasing the premium. Corporate policies are not eligible for a no claim bonus. But with an individual health insurance policy, individual policyholders are eligible for a no claim bonus.
8. Exiting the policy: Once the employee leaves the organisation, his coverage via the group insurance policy ceases to exist. This is not so with individual health insurance policies. Individual health insurances are not linked to employment; hence, they can be utilized even if the senior executive chooses to leave his present employer.
While both corporate insurance and individual health insurance plans have their pros and cons, it's always better to have both if one can afford it. In case of a medical emergency, exhausting the corporate insurance policy first would be advisable. You can then use your individual insurance plan to cover the rest of the expenses if need be. Since a corporate health insurance plan will always be tied to your employer, having individual health insurance can offer protection when you are in between jobs as well.
