Remember the Shield Charm (Protego) in Defence Against the Dark Arts classes from Harry Potter? That was the charm that protected individuals from spells. Wish we could all do that!

That would have defended us from all effects of global warming, redundant wars, and more.

But Hogwarts School of Witchcraft and Wizardry is yet to come out of its secret location so, we have to come up with our shields on our own!

However, one such shield is essential for your health. Considering that the maximum that you can do for staying healthy is to live a green life, it is only logical that you pick up financial aid that would be your aid during medical emergencies. Anticipating a medical urgency and staying prepped for it financially is a full-proof plan that will help you out during your worst.

However, this is just the tip of the iceberg. Availing of individual health insurance plans comes with multiple other perks and you can tap into all of them only if you avail of the best health insurance plans from reputed insurers, tick the checklist for things that you need to know before you avail of a plan and stay aware of the drawbacks of individual health insurance policies, you will be on your way to securing a financial fallback plan for your medical requirements.

What is Individual Health Insurance Plan?

A health insurance plan that offers coverage for a single policyholder is called an Individual Health Insurance Plan.

Health insurance policies can be broadly divided into the following categories -

  1. Individual health insurance plans
  2. Family floater health insurance policies
  3. Group health insurance plans (that also includes corporate health insurance coverages)
  4. Senior citizen health insurance plans (that can be availed as individual plans and as family floater plans)

Among these, individual health insurance policies are one of the most commonly available health insurance products available across the industry and hence are offered by all of the health insurance providers in the country. However, each plan comes with a specific set of features and perks that either makes the policy an excellent insurance product that has been customised to ensure maximum client benefit or it becomes a financial pitfall that fails to keep up to the policyholder’s expectation during their worst medical nightmare.

Here’s a look at the pros and cons of individual health insurance policies -


What are the advantages and disadvantages of Individual Health Insurance Plans?

Pros of Individual Health Insurance Policies

  1. Tax benefits under Section 80D

Policyholders enjoy tax benefits on the premium under Section 80D that they pay towards their health insurance plan. The tax benefits offered to health insurance policyholders are capped at

  • INR 25,000 for individuals below 60 years of age
  • INR 50,000 for individuals above 60 years of age

2.  Health insurance add-ons available

Customisations for individual health insurance policies are convenient considering that the plan needs to be tailored for just one individual. Under such conditions, the buffet of health insurance add-ons is lucrative, efficient, and beneficial for the policyholder. Such add-ons include

Take a look at our blog on Health Insurance Add-Ons to know more about these riders.

3.  Suitable customisation

When there are multiple people in a health insurance policy, tuning the perks as per the medical requirement of each member becomes a cumbersome situation. Moreover, in such cases even if you take up a few health insurance riders to meet the varied medical requirements, you will definitely be taking a financial dip considering the substantial amount added to the premium.

However, with a single policyholder for a health insurance plan, customisation will be a convenient option based on their existing and anticipated medical conditions.

4.  Extensive sum insured

For most reputed health insurance providers across the country, the sum insured on plans can extend from INR 5 lakhs to INR 1 crore. Across this range, any suitable amount is adequate for a single policyholder. Such kind of financial aid will be enough to meet the situations of medical inflation, expensive diagnostic tests, continued pharmacy bills, and frequent hospitalisations.

5.  Pristine restoration benefits

Restoration is a master benefit brought out by health insurance providers. There are multiple types of restoration available in the market as you can find out from our blog on Restoration in Health Insurance (you can find out the best restoration option for yourself in this blog too).

In any kind of restoration that you avail, for any kind of restoration choice that you opt for (once a year, unlimited, for specific ailments, different ailments, for partial or complete exhaustion) as an individual policyholder, you can reap the perks of the refilled sum insured much better.

6.  High No-Claim Bonus

In case you have raised no claims across an entire insurance year, reputed health insurers offer you a lump sum amount on your coverage that extends your coverage bandwidth. This means you will get to enjoy the benefits of a higher sum insured sans paying an extra penny on your premium.

As an individual policyholder, you can take advantage of this perk considerably. All that you need to do is avail of a health insurance plan early in your life so that claims raised are minimum to nil. Thus, by the time you need to access the funds for your medical requirements, your No-Claim bonus will be at a maximum and hence will offer you the best-possible sum insured against your premium.

Cons of Individual Health Insurance Policies

  1. Mandatory policy maintenance for multiple family members is a hassle: When you have multiple family members to take care of, availing of one health insurance policy for each of them surmounts numerous plans. Maintaining multiple such plans, renewing such health insurance plans consistently, and tracking such policies is a cumbersome situation.
  2. Individual health insurance plans are comparatively expensive: Family floater health insurance policies are cheaper as compared to Individual plans. Moreover, when purchasing and maintaining individual plans for each member of your family indicates spiked overall premiums that can quickly become a financial burden.

As mentioned earlier, despite a couple of cons mentioned above, Individual health insurance policies remain one of the most popular insurance products across the market. However, this rising demand for individual plans has brought forth multiple health plans from various insurers. This makes it extremely difficult for potential policyholders to seek out a plan that best caters to both his/her financial and medical goals.

However, here are some of the factors that they can take into consideration while choosing a health insurance policy to avail of a customised plan sans the scare of a financial pothole.

Things To Remember When Purchasing an Individual Health Insurance Plan

  1. Choose an optimum sum insured

When choosing a health insurance plan, it’s important to choose a sum insured that best suits your existing and anticipated medical requirements. Choosing a sum insured that is

  1. Way higher than your required amount would mean superficial financial pressure,
  2. Less than what you require would make you pay out of your pocket and thus dampen your savings.

2.  No room rent restrictions

A majority of health insurance policies come with a room rent and type capping. While on the surface, this seems like nothing, the impact of room rent restrictions in health insurance goes way beyond.

Even without a mandatory copayment clause in your health insurance plan, if you exceed the room rent capping, you will have to end up paying a substantial amount out of your pocket.

The percentage by which you exceed your room rent restriction is equal to the percentage of the hospital bill that you will be paying out of your pocket. This pro-rata-based payment is a significant financial burden that you end up bearing.

3.  No mandatory copayment

Copayments seem like a convenient option to avail of a lower premium while purchasing a health insurance plan. However, during the claim settlement process, the % of copayment for each hospitalisation bill repayment amount exceeds the savings that you make over the premiums. Learn more about how and why you should avoid copayment in health insurance plans from our blog.

4.  No disease-wise sub-limits

You must have seen and heard of plans that apparently offer coverage for ALL ailments. But, in the finer prints, it’s written that for

  • heart-related ailments the maximum funding that they will offer is INR 50,000; or
  • cataract surgery, the insurer will only cover 50% of the amount; or
  • if it’s an organ transplant surgery, the company will pay only for a part of the surgery.

These are the clauses that you should never fall for. Choose a plan with no disease-wise sub-limits so that you do not end up paying substantially out of your pocket even after paying hefty premiums to avail of health insurance policies. `

5.  Minimum waiting period for pre-existing ailments

“If something sounds too good to be true, it usually is.”

-heard this?

Well, it runs true for health insurance plans and their providers too. All of a sudden you might be offered a plan that seems relatively cheap. But more often than not such plans come with an extensive waiting period.

You would not want an individual health insurance plan that comes with a lengthy waiting period due to which you will have to wait for years before you can gain access to the funding offered by the insurer.

Please remember, the acceptable waiting period for premium health insurance coverage is 2 to 3 years.

6.  Optimum restoration choice

So, what kind of individual health insurance coverage do you think would be enough for you? INR 5 lakhs? INR 10 lakhs? INR 20 lakhs? And if these funds fall short, would you go for a cover of INR 50 lakhs? What if you end up not needing so much despite the hefty premium that you are about to pay?

The best one-stop solution for this is choosing a health insurance plan that offers unlimited restoration. As your coverage gets partially/completely exhausted (based on the variant you choose), your sum insured gets restored, thus ensuring that you have convenient access to a broader coverage bandwidth that will prove useful in case of multiple hospitalisation.

(Please note: You can also avail of a restoration/recharge health insurance add-on if your chosen plan falls short of only this one factor. The additional sum that you will need to pay for such add-ons is also pretty low so this won’t affect your finances much.)

While we have mentioned all the factors that would build a great health insurance policy, we also know that from a handful of insurers, most health plans do not stand up to all these factors. Under such circumstances, it’s best to prioritise your requirements - no room rent restrictions, no copayment, and no disease-wise sub-limits should be your precedence.

Now, take a look at the various categories of insurance that fall under individual health plans -

What are the different kinds of Individual Health Insurance Policies?

  1. Senior citizen health insurance plans

2.  Critical illness health insurance policies

  • Critical ailments call for frequent hospitalisations, multiple diagnostic tests, and high pharmacy bills. In such cases, funding is a crucial factor to ensure that no compromise is made on the quality of healthcare services received.
  • Despite the umbrella term of ‘critical ailments’ coverage, health insurance providers are often reluctant to cover some specific ailments or put a cap on the funding that they are willing to offer for specific diseases.
  • Though multiple health insurers do offer critical illness health insurance plans, the critical illness coverage stands more valid with term insurance plans because, in the case of the latter, the policyholder receives a significant sum to meet his/her medical requirements.

3.  Personal accident coverage plans

  • While Personal accident coverage is offered under the individual health insurance bracket, it’s not a particularly crucial product because firstly, right from the day you purchase a health insurance plan, you can raise claims in cases of accidents and that is an automatic coverage with no additional amount included in your premium. Secondly, this coverage makes more sense when taken in the case of term insurance because then the policyholder, in the case of an accident, can receive a considerable amount in the case of complete or partial disability and in case of demise.

What are the best Individual Health Insurance Policies in 2024?

  1. HDFC Ergo

HDFC Ergo is one of the best individual health insurance providers across the market with a Claim Settlement Ratio (CSR) of 97%. From the HDFC stable, some of the best individual plans include - HDFC Ergo Optima Restore, HDFC Ergo Suraksha, and HDFC Ergo energy.

2.  Care

Care, previously known as Religare Health Insurance, is not exactly a new health insurance player in the market. As of now, this insurer has a steady hold over the market due to its rapport among policyholders over a CSR of 95.2%. Some of its best individual health insurance policies include - Care Care, Care Plus, Care Advantage, and Care Freedom plan.

3.  Niva Bupa

Niva Bupa has been in the insurance industry for a long time and has earned a CSR of 90.68% over its diverse list of health insurance products and its reputation across policyholders. Niva Bupa’s individual health insurance plans are popular across the industry and comprise - ReAssure and Health premia variants (Gold, Platinum, and Silver).