There is a group health plan and an independent health plan when it comes to health insurance. Group health plans are bought by registered groups like employer-employee groups, clubs, banks, trade unions, etc. Such plans cover their members under a cost-effective health insurance scheme and give various benefits. However, independent health insurance plans score over group health plans when it comes to continuity benefits. Let’s understand how.
Continuity benefits – the concept
In simple terms, continuity benefits mean the benefits that you can get on continuous coverage. Alternatively, if you renew the plan continuously, year or year, you can get continuity benefits additionally.
Continuity benefits – group v/s independent health plans
Group mediclaim plans have one primary objective. These are to provide affordable health insurance coverage to the members of the group. However, as an insured member, you do not get to enjoy any additional benefit on successful renewals of the plan except the continuity in coverage.
Other problems ailing group mediclaim plans in terms of continuity are as follows –
- There is no guarantee of lifelong coverage. The coverage stops as soon as you exit from the group or retire (in the case of employer-employee groups)
- There is, however, a provision for continuing the coverage as an independent health plan on your exit from the group. However, insured members do not avail of this provision due to a lack of awareness and/or ignorance. They simply allow the coverage to stop.
- Even if some aware members opt for conversion of the group plan to an individual one after their exit, the plan offered by the insurer might not fulfill their coverage needs. Moreover, the premium might be higher making the plan costly against other available options.
- There is no concept of a no claim bonus if you don’t make any claim in your group health insurance plan.
So, if your employer is sponsoring a group health plan, continuity of the coverage would be problematic after you retire. The coverage would either stop altogether. It would be granted at a higher premium given your age. Affording a higher premium can prove challenging after you retire.
These problems are solved in an independent health insurance plan. An individual or family floater policy offers policyholders a range of continuity benefits. These benefits include the following –
No claim bonus
The first continuity benefit, of course, is the provision for a no claim bonus. This bonus is usually provided as a cumulative increase in the sum insured.
It is also called a cumulative bonus. Under this option, the sum insured rises by a specified percentage after each claim-free year on a cumulative basis.
For instance, say you have a health plan of Rs.10 lakhs and the no claim bonus is 20% subject to a maximum of 100%. So, after the first claim-free year your sum insured would increase by Rs.2 lakhs. Then after the second consecutive year, it would increase by another Rs.2 lakhs and so on. This increase would continue after each successive year till 5 years when the sum insured doubles. Thereafter, you cannot further increase the sum insured.
The no-claim bonus allows you to enjoy higher coverage without paying for it even after you retire.
Lifelong renewability
Independent health insurance plans are renewable for as long as you live. Your retirement does not impact the coverage. As long as you renew the policy, you can enjoy a comprehensive scope of protection even in your golden years. However, after the waiting period is over this has the same benefits as corporate health insurance.
Even if you port your policy and switch to another insurer, you can retain the continuity benefits of the plan.
The bottom line
The coverage provided by a group health plan is surely cost-effective. However, if you consider retirement and the continuity benefits, the plan doesn’t have much to offer. That is why, you need an independent health insurance plan, complete with an optimal sum insured and the coverage features you require. Besides providing all-round financial protection, the plan would also allow continuity benefits in the form of a claim bonus and lifelong renewability. While no claim bonus would allow you to enjoy a higher coverage in your golden years, lifelong renewability would ensure that retirement does not take away your insurance coverage.
So, supplement your group health plan with an independent policy and secure your retirement financially against medical emergencies that are a part and parcel of old age. To check more click on http://blog.oneassure.in