Sneha joined a well-known Multi National Company in 2019. She did have offers from other companies during the time of joining. But this company offered her several additional perks, including a Corporate Health Insurance plan, so she chose to go forward with this offer.
In 2022, she decided to take a career break for a year or so because she was diagnosed with a minor but persistent ailment that would require frequent hospitalization and medical care. However, she is worried about losing her health insurance coverage if she opts out of the job.
She regrets not availing of an individual health insurance plan when she was employed. The 3 years of employment would have covered her waiting period on the individual plan, and she would have now had an extensive sum insured to cover her medical treatment charges.
But now what? Can she opt for portability from corporate to individual health insurance policy? Should she do that? What exactly is the difference between the two? Here’s a look at all about porting your corporate health insurance policy to an individual health insurance plan.
What is Corporate Health Insurance Plan?
Corporate health insurance is a Group Health Insurance plan that covers all company employees against any medical emergency. So instead of individuals approaching the Health Insurance company, your company negotiates the terms for the entire group.
Employee well-being is a priority for a majority of companies across the world. The direct relationship between a productive and a healthy employee seems to have inspired this approach.
On the one hand, the COVID-19 pandemic was a catalyst for increasing the number of companies offering such health insurance coverage. On the other hand, the pandemic pushed many companies to cut down on the health insurance coverage offered or the entire plan to cut down their operational expenses and survive the outbreak.
While corporate health insurance coverages are a welcome initiative, your employers completely customize this plan. This leaves no room for the policyholder to fine-tune their plan per their medical requirements.
| PROS of CORPORATE HEALTH INSURANCE | CONS of CORPORATE HEALTH INSURANCE |
|---|---|
| Employee premium is paid by the employer. Additional coverage for the family demands a nominal additional premium that is deducted from the employee’s monthly salary. No waiting period for pre-existing illnesses. No pre-medical screening is conducted before availing of this policy. Tax deductions under Section 80D. |
Employers hold power to customize health insurance plans. Thus policyholders can’t tailor their plans to their requirements. Corporate health insurance policies are volatile and depend on the employer you are employed under. The coverage is minimal. Policy tenure = employment tenure. Room-rent restrictions might be applicable. Copayments are a possibility. |
Considering the aforementioned pros and cons of corporate health insurance policies, it is evident why Individual Health Insurance Plans for corporate employees are not a choice but a necessity. With limited coverage and a non-customizable plan, you do need a plan that would be a financial constant with ample coverage, irrespective of whether you are employed, unemployed, or a freelancer (you can also read our blog on Health Insurance plans for Freelancers)
What is an Individual Health Insurance Policy?
Individual Health Insurance Policies are a financial contract signed between your chosen health insurer and yourself. The policy offers you a considerable sum that effectively meets any and all of your medical expenses. You must pay a pre-decided premium (that can be paid yearly or for a 2-year or 3-year plan at one go).
When you approach the best health insurance providers across India, you choose a suitable plan that can be customized per your financial and medical requirements.
| PROS of INDIVIDUAL HEALTH INSURANCE | CONS of INDIVIDUAL HEALTH INSURANCE |
|---|---|
| No copayment is required if you opt for any of the best health insurance policies for 2023. Multiple riders can be chosen. No room rent capping (based on the chosen plan) Policy tenure depends on your choice. An extensive sum insured is available. Daycare treatment coverages Affordable coverage extension over Top-Ups and Super Top-Ups. Domiciliary treatment coverages Tax deductions under Section 80 D. High No-Claim Bonus. |
Premiums are comparatively higher. There is a waiting period for pre-existing ailments. |
Thus, with Individual health insurance plans, you are looking at a foot-long list of features that can benefit you as a policyholder. All you need to do is know the probable drawbacks (imposed copayment, mandatory room rent restrictions, disease-wise submits, and more), skip the insurers who demand these, and opt for a suitable plan.
Since we are talking about porting your corporate health insurance policy to an individual plan, there must be a few reasons behind this, right? Other than the fact that your corporate policy evaporates when you go out of business with your employers, leaving you stranded and insurance-less, there need to be some differences that make individual health insurance plans such a great option.
Here is a quick tally between the two plans to understand the difference.
Corporate Health Insurance Plan vs. Individual Health Insurance Policy
| Fields | Corporate Health Insurance Plan | Individual Health Insurance Policy |
|---|---|---|
| PREMIUM | Comparatively low and involves the employer’s wallet, not yours (the policyholder’s) | The relatively high base premium that you will be paying off annually. |
| SUM INSURED | Determined by the employer and often falls short considering the imminent and ongoing healthcare cost inflation. | Extensive and caters to the spiked hospital bills and the pre-and post-hospitalization expenses. (P.S. there is also the Restoration feature that boosts the coverage right back to its limit immediately after a claim is made.) |
| DEPENDENCY | Only the employer can tweak the plan’s details and perks, including the offered coverage options. | You, the policyholder, have all the power - to choose the sum insured, the perks, and the features that are a priority for you. |
| CUSTOMIZATION | Employers can customize it. However, since this is a form of group health insurance, getting a tailored plan for each policyholder is impossible. | Insurers are now trying to offer plans that can be customized holistically per the policyholders' medical requirements and financial preferences. |
| ADD-ONS | Not all plans offer employees an option to choose individual add-ons. | The number of health insurance add-ons is endless. You can look at Personal accident rider Safeguard riders that offer an inflation shield, provide coverage for consumables, and leave the NCB untouched in case of minimum claims. Unlimited Restoration add-on Copayment waiver add-on, and more |
| ELIGIBILITY | Need to be employed in a company | Anyone can avail of an individual health insurance policy. |
| EXIT CRITERIA | The policy lasts as long as you are employed with the concerned company. | The policy lasts as long as you continue paying the premium. |
| WAITING PERIOD ON PRE-EXISTING DISEASES | NONE | A minimum of 2 to 3 years. |
So let’s understand this -
Your employer offers you a corporate health insurance plan. You decide to include your family in this policy too. After all, your insurance will be paid off by your employer, and a nominal amount will be deducted from your salary for your family, so why not?
The coverage is around INR 10 lakhs. You are financially and mentally at peace knowing that you have secure funding to meet emergency medical requirements. And since pre-existing ailments have no waiting period, you do not have to worry about sitting back for your insurance fund to kick in.
You feel blessed for a couple of years even though you or a family member had to get hospitalized because none of your savings was munched on for hospital bills.
Something even better happens now; you accumulate enough savings to kickstart your forever dream - a business of your own. But now, if you pursue your dreams, you are exposed to the high probability of a substantial financial strain in case of a medical emergency that would take a major bite out of your savings targeted to grow your business.
So you paid for an insurance plan that is no longer effective. It seems a bit unfair, doesn’t it?
Hence, the decision to port your corporate health insurance plan to an individual health insurance policy.
How to transfer your corporate health insurance plan to an Individual plan?
Should you transfer your corporate health insurance plan to an Individual plan?
You definitely should port your corporate health insurance plan to an Individual plan provided you don't already hold an individual plan already. However, whether your corporate health insurer will allow it is another story. Also, since corporate plans are a type of group health insurance policy, portability won’t be easy.
Let’s just say - the best option is to avail of an individual health insurance plan. The time to avail of this plan can be two - much before the corporate plan starts or you are employed and simultaneously with the corporate plan. Both carry similar benefits -
CASE 1: During the early years of your life, irrespective of the state of your employment (for all the insurance company cares, you can be a freelancer, unemployed, or a student)
- Considering your low age, you pose a low risk of payout for insurers who would demand a low premium from you for high coverage.
- You will also be done with your waiting period considering the marginal to no chances of acquiring ailments during your early years.
- You will have personal accident covearge from Day 1 for your impulsive days.
- Each year when you make no claims, you get a chance to boost your coverage at a pre-decided premium, thanks to the No-Claim Bonus feature.
CASE 2: As soon as you’re employed, and your corporate health insurance heal plan kicks in
- While you go through the waiting period for your individual health insurance policy, your no-waiting corporate plan acts as a safety net.
This way, while dealing with the complicated portability process, you are not left without an insurance plan. Also, if you exhaust your corporate plan coverage, you will have convenient access to the extensive sum insured by your individual health insurance.
Ditto’s Suggestion:
If you have a corporate health insurance plan and an individual health insurance policy, exhaust the corporate plan first. This policy is flexible, has no waiting period, and often poses no complications for the cashless or reimbursement process.
After exhausting this coverage, approach your individual plan (try to choose a plan that offers restoration benefits, and if required, take up one of the best Super Top-Up policies that would help extend your coverage at a nominal premium)