Why you should Convert Employer Health Insurance into Individual Policy?

Group health insurance covers have a lot of limitations in terms of coverage amount, flexibility, and duration. Once you move out of the job, the group cover terminates. Individual health cover is a must even if are already covered by a group plan.

Group health insurance policies and individual health insurance policies are drastically different from each other. These differences are not the simplest to comprehend and as a result, many people confuse between individual and group health insurance policies. A comparison between these two kinds of policies can be rather useful to help one understand the differences between the two, and therefore, allowing them to make a truly informed decision about choosing a health insurance policy that best addresses their needs.

Group and individual health insurance policies are rather similar in terms of the coverage they provide. However, there are stark differences between the two kinds of policies, especially when it comes to the details. Before we begin to count the benefits of converting to an individual health insurance policy from a group health insurance policy, it is important to know what each policy means.

What is Group Health Insurance and Individual Policy?

A Group Insurance policy is basically an which is taken by an organization or an employer for its employees. Organization have the choice of either opting for a pre-planned insurance policy provided by an insurance company or they may formulate a self-insured plan themselves.

An Individual Insurance policy, as the name suggests, is an insurance package which is taken by an individual themselves or for a close group of people like their family. However, contrary to what the name indicates, an individual insurance doesn’t cover only a single person.

Benefits of Converting to an Individual Plan:

Waiting Period – Group health insurance policies do not offer a waiting period for all diseases. However, individual health insurance policies do offer differing terms of waiting period for different categories of diseases. Under individual health insurance, waiting period of 30 days is provided for coverage of common disease, 24 months for specific diseases and a waiting period of 48 months is provided for coverage of pre-existing diseases. Do keep in mind that the waiting period offered for specific diseases will differ with each insurance provider.

Waiver of Waiting Period – Upon conversion from a group health insurance policy to an individual health insurance policy, you stand to benefit from the waiver of waiting period. This is done due to the reason that the waiting period for diseases is far less under a group insurance policy. Sometimes, there may be no waiting period altogether. For this reason, when you convert from a group insurance policy to an individual insurance policy, the coverage will begin from the very day on which you have made the conversion to an individual policy.

Things to Remember While Converting:

Some important points to keep in mind while converting from a group health insurance policy to an individual policy are as follows:

  1. Conversion must be done to the same company – Do remember that when you are converting from a group insurance policy to an individual policy, the conversion must be done within the same insurance company. In other words, you must convert to an individual insurance policy with the same company with which you held a group insurance policy. It is not feasible to shift to another company to convert to an individual policy. However, the conversion from a group to an individual insurance policy will be done at the discretion of your company.
  2. Conversion should be done no later than 45 days – In order to convert to an individual policy, the conversion must be done in no more than 45 days before the policy is lapsed. Conversion taking any longer than 45 days will not be possible.
  3. Medical test may be required – In some cases, it is possible that the insurance company may ask for a medical test report to check the person’s medical history before converting the policy. Once the medical report has been provided and evaluated, the company may begin the process of converting the policy.

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Disclaimer: Premiums may vary depending upon factors like age, location and prevailing taxes/GST.

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