What are the benefits of an individual health insurance plan?

A health insurance plan is invaluable in times of medical emergency, and considering the rising costs of healthcare services, it is an affordable way to manage unexpected health risks for yourself and your loved ones.

In India, there are hundreds of different health insurance plans that you can choose from. This includes family mediclaim plans and employer-sponsored group health insurance plans. However, an individual health insurance plan is among the most preferred options for a host of reasons.

As the name suggests, an individual health insurance plan covers a single person/ policyholder and offers them financial protection during health emergencies. The benefits extend to hospitalisation coverage, OPD coverage and even room rent.

Reasons why it makes sense to choose an individual health insurance plan -

1. Tailor made protection

An individual health insurance plan can be tweaked to suit your needs, which is not possible with other options like a group health insurance plan or a family floater plan. Not only can you choose the amount of sum insured based on your budget and health needs, but you can also pick additional riders like cancer and personal accident coverage.

To take a popular case- if there is a history of certain health issues in your family, you can opt for an additional critical illness rider to safeguard your future health. This is just an example, you can opt for whatever features that suit you best at this point of time and keep updating your plan as you go.

2. Guaranteed coverage

Under an individual health insurance plan, the coverage amount specified in your policy document will be exclusively available for use in the event of an emergency (subject to limitations in the policy document).

On the other hand, the coverage you get through a group plan is not only limited but usually excludes coverage for pre-existing diseases and even critical illnesses. With a family floater plan too, the sum assured benefits are collectively shared by all members covered under the plan.

Say, for example, you opt for a family floater plan of ₹ 5 lakh and an ailing member uses up 3 lakh during an emergency. If another incident happens, say you need a surgery which costs ₹ 4 lakh, you will be covered only for the balance ₹ 2 lakh cover and the other ₹ 2 lakh will have to be paid out of your own pocket.

With an individual health insurance plan though, you do not have to worry about lack of coverage as you will be the only member eligible to use up the benefits.

3. Managed risk premiums

Did you know that the premiums charged for your individual health insurance policy are calculated based solely on your age and health status?

This is an important point to remember as the same does not hold true for family health insurance plans. The premium for such plans will vary based on the status and history of all members of your family.

Hence, if you have any senior citizens in your family or anyone with pre-existing diseases, your premium will increase accordingly.

4. Lifetime renewability

Many contemporary insurance providers offer assured lifetime renewability for your individual health insurance plan without your past claims affecting your new premium. This ensures that you have affordable insurance coverage, especially during old age, when you need it the most.

However, this is not possible, if you are only covered by an employer-sponsored group plan. Your employer's insurance plan is only valid till the time you are an employee. If you retire or leave the job, your insurance benefits cease immediately.

Tax benefits of individual health insurance plans -

The premium amount on a health insurance plan can be claimed as a tax deduction under Section 80D of the IT Act, thereby lowering your tax liability.

This benefit is not available via an employer-sponsored insurance plan, because you are not the one paying for it. This benefit can be claimed across all other types of health insurance plans, but only by the primary policyholder/ buyer of the insurance.

For example, you have a family of four covered under a group plan, and you are the primary policyholder. The tax benefit can only be claimed by you and not any other family member. However, if each family member is insured through individual policies, they can all claim tax deductions on their respective policies, up to a specified limit.

Whether you are a single first jobber or one with a family, having a health insurance plan is an absolute necessity to ensure financial peace of mind if an emergency does strike. Health insurance is also a sound investment to make as it allows you to get tax deductions under the income tax act making it even more affordable.

While all health insurance plans aim to provide the best of coverage, an individual health plan such as Niva Bupa's Health companion goes above and beyond to offer a lot of flexibility and perks with the insurance plan. Check more plans from Niva Bupa at www.nivabupa.com now.