It’s that time of the year when employees renew their group health insurance, which is generally offered by their corporates. At such times, those with an existing personal health cover may wonder if the group cover is needed. On the other hand, employees with an existing group cover may also feel the burden of a personal health cover and may look to avoid/delay investing in it.

But from a risk coverage point of view, both covers — group and personal— have salient features that the other doesn’t offer. This makes both the covers critical to a comprehensive health insurance.

Group covers

Harnessing the power of large numbers, group insurance offers certain unique features, including lower cost of premium and simplified paperwork for admitting and disbursing claims. But the largest benefit is from Day one coverage. Group health insurance kicks off from the first day and generally does not involve any waiting period for pre-existing diseases.

A personal health cover almost always will have a waiting period, 1-2 years at the lower end and up to four years at the higher end. This is well appreciated by employees with chronic or other conditions, who are still to go through 1-3 years of waiting before personal covers can insure against ailments from those conditions.

The other benefit is coverage to family and parents/in-laws, especially the latter. Considering the high cost, limited availability for senior citizens and a waiting period, the group policy’s ability to insure the elderly is a valuable feature, which is expensive to replicate in a personal cover. Even if the cover is to be opted in with an extra cost, it is recommended to cover family and senior citizens under group policy benefits. The zero waiting period is applicable to family as well, which is an extension of the benefit.

Maternity cover is a welcome feature of group covers. Even as personal health covers offer a range of options to cover maternity-related expenses, they come with a waiting period that, at the least, starts from nine months or are expensive to add as a feature. Group covers include maternity-related expenses, from Day one and the child is also included in the cover on informing the insurer.

Personal covers

The distinct advantage of personal cover is higher coverage, customisation of policy and portability. Health insurance coverage amounts have kept pace with rising medical inflation and advances in medicine to offer even ₹1 crore health covers at reasonable premiums. Top-ups and super-top ups can also be utilised to build a large health cover. This is near impossible to achieve in group insurance, whose covers start from ₹2 lakh to ₹10 lakh for the senior cadre of employees.

Group covers aim to help employees recover from normal ailments and are hence designed to treat them. Serious ailments requiring specialised medical care leave lower probability of continuing gainful employment post recovery and hence are outside the ambit of group covers and their coverage. Such ailments are when the personal covers with large corpus find their use.

A range of add-ons and features have made health insurance a highly customised product. Outpatient check-ups, no claim bonus or discounts on premiums, treatment in foreign countries, and premium waivers are some of the add-ons available in health insurance. Group policies, on the other hand, are standardised solutions that offer very little customisation.

Policy portability and, more importantly, continuity is an often overlooked advantage in personal health insurance over group covers. Health insurance provided by group coverage expires on change in job/organisation till a new policy of the new corporate has to begin coverage. Personal health insurance is consistent in coverage without any spells of discontinuity as long as premiums are serviced. A policyholder can also port his policy to a better offering without losing his no claim bonus, moratorium and other accumulated benefits.

Considering the convenience and quick coverage of group insurance, higher and customised coverage of a personal health insurance, a policyholder should opt for both the policies, which complement each other.

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