Individual Health Insurance Plans: Things You Should Know

With an impulsive surge in medical costs clubbed with annual healthcare inflation in the range of 15-25%, hospitalization on account of any grave illness can cost you not less than Rs. 3 lakh. In the absence of a proper health insurance cover, rest assured, you’ll be either digging into your hard earned savings or will be running into some serious debts.

Most first time buyers are puzzled as to opt for an individual health insurance for each family member or the family floater insurance plan. In this article, we will discover the nitty-gritties related to individual health insurance for families.

What is Individual Health Insurance?

In simple terms, an individual health insurance policy means a separate policy for each of the family member with individual sum insured. To make things easier, let's consider Gupta family from Mumbai. Mr. Gupta (50) has recently bought Apollo Munich individual health insurance for himself, his wife (30), daughter (20) and son (18) for a coverage of Rs. 3 lakh each.

Although Mr. Gupta paid a whopping amount of approx. Rs. 24,500 towards the premium, there are few things he considered before investing in the plan. As Mr. Gupta has recently undergone gall bladder surgery, he wanted to ensure that his medical condition doesn’t unreasonably lead to waiting period for the rest of the family members. Also, he wanted to block a dedicated sum insured for each family member. These reasons encouraged him to decide on the individual health insurance for the family. While we are at it, let’s delve deeper into some pros and cons for opting the individual health insurance for the family members.

Pros:

  • The sum insured remains solely for the insured members. Even though the total claims raised by any member exceeds his own sum insured, he cannot dig into any additional sum insured and hence every insured has a guaranteed coverage amount at their disposal whenever required
  • Even parents and in-laws can be a part of this coverage at additional premium
  • Suitable for older families as they are prone to greater health risks
  • If any insured member has a pre-existing condition as per policy guidelines, the rest of the members need not wait to claim until the waiting period ends
  • Discounts on premiums if more than two members
  • There is no maximum age for renewal

Cons:

  • The individual insurance for the families works out to be costlier than the family floater
  • The individual coverage is not suitable for younger families

Features and Benefits of Individual Health Insurance

  • Extends benefits of a health insurance policy to individuals only, making him/her eligible for individual sum assured rather than a floating sum assured
  • Recommended especially for individuals with greater health risks
  • Includes hospitalization expenditures
  • Includes financial protection for medical expenses like hospital room rent, surgery, doctors’ consultation charges and diagnostic tests
  • Covers pre and post hospitalization charges
  • Covers critical illnesses
  • Renewal applicable for a lifetime, with no maximum age limit being applicable
  • Offers tax deductions under Section 80D of the Income Tax Act, 1961

What is Covered under an Individual Health Insurance Policy?

  • Hospitalization and medical expenses for room rent
  • Pre and post hospitalization
  • Emergency services
  • Doctors’ consultation fees
  • Maternity and new born care

What is Not Covered under an Individual Health Insurance Policy?

  • An individual health insurance policy does not offer coverage for pre-existing diseases during the waiting period of 2 years to 4 years
  • Does not offer coverage for certain illnesses like hernia, cataract, sinusitis, etc. during the first year of the policy term
  • Does not include coverages for some other specific treatments like Naturopathy and dental treatments
  • Does not cover aesthetic and cosmetic treatments
  • Certain expenses like cost of hearing aid, eye lens, spectacles, etc. are not included under this plans
  • Treatments for health concerns caused by alcoholism and drugs are not included

How the Premium is Determined in Individual Health Insurance?

Cost towards premium is one of the major deciding factor while opting for any insurance policy. Below are few deciding factors on the premium calculation:

  • Administrative and Promotional Costs: Designing of policy, underwriting costs, marketing and advertising costs, brokers’ commission are some of the costs involved under this canopy and where do you think they are recovered from? Of course, through the premiums paid.

  • Savings from Investments: When you pay the premium towards the insurance policy, the insurance company put that money into various public investments. Health insurance premiums are calculated basis returns from these investments.

  • Medical Underwriting: This is where the risk evaluated and crucial decisions are taken to prevent the insurance company from making any losses.

  • Rate of Mortality: The rate of mortality varies for different age and income bands and is usually high for older customers. For example:

A. Premiums are more if sum assured is higher

B. Premiums are higher as one grows old

C. Premiums are inflated for those suffering from lifestyle illnesses like blood pressure or diabetes

  • Personal Medical History: Insurance companies may or may not require you to undergo a medical check-up before the insurance policy is issued. However, your medical history also decides policy premium you would be required to pay. Keep in mind, habitual smoking and drinking summons higher premiums.

  • Community Rating: The geographical location, lifestyle habits, overall development of the region along with the trade activities and political stability of the place are few other influential factors that decide the premium amount.

  • Band Rating: Under this segment, the insurance company settles on a base rate to be charged for a specific set of people with the similar attributes. These include aspects like group size, geographical location, gender, age, etc. For example: a young and healthy family will pay less premium as compared to a family comprising of senior citizens.

What's the Right Choice? Individual or Floater? Let's find out!

As a first time buyer, one of the key challenge is to decide between the individual plans for the family or opt for a family floater insurance policy. As both options carry their own pros and cons, it’s best to evaluate your individual needs, age bracket, family income, medical history to arrive at an informed decision. With the availability of online portals like Coverfox.com, you can compare different plans and combinations to choose the cream of the crop.

Also Read: Choosing Between Family Floater and Individual Health Insurance

Best Individual Health Insurance Plans of 2018-19

  • ICICI Lombard - Personal Protect Insurance Policy
  • Bajaj Allianz - Individual Health Guard
  • Oriental Health Insurance - Individual Mediclaim
  • Star Health Insurance - Medi Classic Insurance

How To Compare and Find the Best Individual Health Insurance Plan?

  • Research thoroughly regarding the features and benefits offered by an individual health insurance plans from across insurance companies
  • Browse through the list of network hospitals to check whether it includes some of the hospitals that are in your vicinity or those that you visit
  • Compare the premium quotes
  • Decide whether you prefer low premium and comparatively lower coverage, or higher premiums and higher coverage

Documents Required for Purchasing an Individual Health Insurance Policy

  • Proof of Age: Acceptable documents are Birth Certificate, PAN Card, Voter’s ID, Driving License, Passport, School or College Certificate, etc.
  • Photo Identity Proof: Aadhaar Card, PAN Card, Driving License, Passport, Voter’s ID, etc.
  • Proof of Address: Acceptable documents are Ration Card, Telephone Bill, Electricity Bill, Passport, Voter’s ID, Bank A/C Statement, etc.
  • Proof of Income: Salary Slip, Employer’s Certificate, Form 16, etc.
  • Medical Check-up: If asked by the insurance company
  • Passport size photograph

The Finale Word

Whether you opt for individual policies for your family or insure them under family floater plan, as mentioned prior, it’s best to assess your requirements coupled with your financial health to take a perfect decision. While an individual plan could make sense for a young family, a family floater will be the right choice for someone with older kids. In addition to this, room rent sub limits, cashless hospitalization tie ups, pre-post hospitalization cover and other benefits on offer should also form crucial part of your deciding components.

FAQs on individual health insurance

I Am Already Covered by Employer's Insurance, Should I Still Opt for Individual Cover?

With the medical costs soaring the sky, a decent health insurance cover is what we need today. As group medical insurance policies come with a stern limit on coverage amount, supplementing it with an individual policy cover would be an ideal situation to ensure a sizable sum insured in case of any major hospitalization.

I Have Just Undergone Hysterectomy. Can I Still Opt for an Individual Policy?

Yes, you certainly can. However, as most health insurance policies are armed with waiting period to cover any pre-existing diseases, any expenses/hospitalization triggered by your medical history will not be covered during this period.

Can I Include My Parents and In-Laws on Individual Health Policies?

Well, technically yes, you can. However, depending on their age, there are other options especially tailor made for them. If they are beyond the age of 60 years, customized plans for senior citizens can be considered.

Can I buy individual health insurance plan online? If yes, please explain how?

Yes, you can purchase your preferred individual health insurance plan online by following these simple steps:

  • Research thoroughly regarding the features and benefits offered by individual health insurance plans from across insurance companies • Browse through the list of network hospitals to check whether it includes some of the hospitals that are in your vicinity or those that you visit
  • Compare the premium quotes
  • Decide whether you prefer low premium and comparatively lower coverage, or higher premiums and higher coverage
  • Purchase the individual health insurance plan of your choice from the official website of the insurer or from a third party broker website that offers the policy

How much does individual health insurance cost? Explain zone wise pricing with an example?

Apart from varying in terms of insurance companies and coverage offered, premium rates for individual health insurance also varies on the basis of zones or the location an individual belongs to. There are three zones – Zone 1, Zone 2 and Zone 3, with premiums for each zone being 10% lower than the previous zone. For instance, if the premium for a certain individual health insurance plan is Rs. 5,000 for a resident of Zone 1, the premium for the same plan for a resident of Zone 2 will be Rs. 4,500. Similarly, for someone from Zone 3, the premium eligibility will be Rs. 4,050.

How do I apply for individual health insurance online and offline?

For purchasing an individual health insurance plan online, you can follow the below steps:

  • Research thoroughly regarding the features and benefits offered by individual health insurance plans from across insurance companies
  • Browse through the list of network hospitals to check whether it includes some of the hospitals that are in your vicinity or those that you visit
  • Compare the premium quotes
  • Decide whether you prefer low premium and comparatively lower coverage, or higher premiums and higher coverage
  • Purchase the individual health insurance plan of your choice from the official website of the insurer or from a third party website that offers the policy If you prefer the offline process, you can visit the branches of various insurance companies to assist you with the features, benefits and premiums on their individual health insurance. You can compare between them and then take a conscious decision.
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