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Individual Health Insurance: Unfolding the Essentials

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.24500 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

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?

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

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.

Frequently Asked Questions:

What Are Some Popular Individual Insurance Plans for Family?

Below are few plans offered on individual sum insured basis that can be taken into account.

  • Religare Care No Claim Super: With attractive features like 100% Recharge Benefit, No Claim Bonus unto 150% and a complementary annual health checkup, Religare’s No Claim Super plan is definitely worth considering. To know more about this plan click here.

  • Apollo Munich Optima Restore: With the maximum individual sum insured of Rs.15 lakhs, Apollo Munich Optima Restore offers benefits like coverage of domiciliary treatment, pre-post hospitalization for 60 and 180 days respectively, Organ Donor and Restore Benefit. To know more about this plan click here.

  • L&T Medisure Classic: Strongly backed by a powerful brand like L&T, the Medisure Classic plan should be on your consideration list with features totally worth paying for. With maternity & new born cover along with hospital cash, ambulance charges and cover for Ayurvedic treatment, it also offers options like room rent waiver and double sum insured for critical illness at an additional premium. To know more about this plan click here.

  • Star Medi Classic: Automatic Restoration of Sum Insured and cover for non-allopathic treatments are just few of the many benefits offered by the plan. The premium pricing is also quite cost-effective in comparison to other plans offering similar benefits. To know more about this plan click here.

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.