How to Switch from Group Health Insurance to Individual Health Cover
Updated On Oct 14, 2022
When an employer provides health insurance to their employees as an additional perk and benefit, it is known as a group health insurance plan. Whereas, Individual health insurance is the plan bought by an individual for himself and his family.
Group health insurance and individual health cover are distinct from each other. On the one hand, where individual health cover provides long-term continuity, the group health insurance has inbuilt limitations in terms of the coverage amount, flexibility, and duration. The policy's coverage for the employee and their dependents ceases if the primary insured leaves their position. Although group coverage appears to be a popular option among the employees, its restrictions prevent it from being a good alternative.
According to the Health Regulations 2016 portability guidelines, any individual or family member covered under any group health insurance policy has the right to switch from a group plan to individual health insurance or a family floater policy with the same insurance company.
Basic conditions for shifting to an Individual Health Insurance Plan
The norms under group medical insurance are more moderate as the entire group gets insured here. Thus, the accumulated waiting period can be carried forward by you for the pre-existing illness at the time of switching your insurance cover.
However, it is critical to understand that switching insurance coverage from a group policy to an individual policy can only be done with the same insurance provider. You can change your insurance company only after completing at least 1 year of individual cover with the current insurance provider. Moreover, you can switch plans if your whole family is insured by it. For this, you can either go for individual plans for all the family members or you can also choose a family floater plan.
Points to Remember while Switching from Employer-Sponsored Health Cover to Individual Cover
Consider the following when trying to switch from employer-sponsored health insurance to individual health insurance:
1. Switch as per discretion of the insurer: As per IRDA rules, an individual covered under a group plan may opt for conversion from an employer-provided health insurance policy to an individual health insurance plan with the same insurer by completing the required formalities. Regardless, the insurer will decide whether or not to accept the conversion. The insurer has complete control over the new scheme's terms and conditions, as well as the premium amount. After one year, the insured can even use the portability right with another insurer.
2. Not later than 45 days: You must notify the insurer of the conversion at least 45 days before the expiry date of the existing group policy.
3. Pre-medical checkup: Before conversion, some insurers may also ask for a pre-medical checkup to check the person’s medical condition.
4. Waiting period: The group health insurance generally has no waiting period, and the pre-existing diseases are covered from day one. As per IRDA guidelines, when you switch from a group health insurance to individual health insurance or family health insurance cover, the waiting period is not wasted and is carried over. However, in case your group health insurance has a waiting period and you have only served a part of it, the balance will be carried over to the new policy under the same insurer.
Procedure for Shifting from Group Health Plan to Individual Health Plan
The procedure for switching from group health insurance to individual health insurance is outlined below.
- Choosing a policy: The first step is to select a health insurance policy that fulfills your requirements. When choosing a health plan, an individual must consider the coverage amount, benefits, exclusions, terms and conditions, and so on. One must pick the best policy as per their needs as the features and benefits of health insurance plans differ from each other.
- Filling out the form: Once you've made your decision, you'll need to fill out a form to switch from group coverage to personal coverage. You must provide information about your current policy, claim history, proof of age, medical history, and declarations (if any). Some insurance companies may also require a pre-medical exam.
- Submission of documents: The form and all the required documents need to be submitted 45 days before the renewal date of the existing policy.
- Payment of premium: The insurer processes the application after receiving the documents. You are informed about the new policy's terms and conditions, as well as the premium amount. The overall process generally takes about 15 days. If you agree to the terms and conditions, you can pay the premium and get covered with the new policy.
Benefits of Shifting to an Individual Health Insurance Plan
The advantages of switching from employer-provided health insurance to an individual health plan are as follows.
1. Increasing the sum assured: While switching from a group health insurance to an individual health insurance policy, you can increase the policy cover. However, in such cases the benefits of the waiting period will be applicable only on the existing sum assured and not on the new one.
2. Credit gained on waiting period: As stated before, during conversion, the credit gained in the form of the waiting period for pre-existing diseases under the group plan is carried over to an individual plan. However, the benefits are only available if the policy is kept in force without interruption.
3. Comprehensive coverage: When compared to group coverage, individual health insurance provides comprehensive coverage. You can also tailor the plan to your specific requirements and preferences.
At the End
As a result, group health insurance is more reliable, but it does not provide all of the benefits of an individual policy. So, next time, you are worried about group health cover ceasing. Don’t! You can easily convert your group health insurance to an individual policy and enjoy benefits such as comprehensive coverage, waiting period credit, and an increase in the sum assured.
Also Read
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Why Choose a Family Health Policy Over an Individual Insurance Plan?
