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Tata Capital > Blog > Insurance > Which is recommended, individual or corporate health insurance?

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Which is recommended, individual or corporate health insurance?

Which is recommended, individual or corporate health insurance?

Health and medical emergencies strike unexpectedly. They demand immediate attention and often put a strain on finances. This is why most people get health insurance to cover the surgical and medical expenses of their loved ones and themselves.

If you are looking to get health insurance, you know that individual and corporate health insurance are two of the most popular types of health insurance options. So, which one should you choose?

In this blog, we will explore the intricacies of individual and corporate health insurance to help you choose one that aligns perfectly with your requirements.

What is individual health insurance?

An individual or personal health insurance policy provides coverage for one person’s medical expenses related to surgeries and hospitalizations. Your premium for this policy depends on your age, medical history, and pre-existing medical conditions.

How does individual health insurance work?

Individual health insurance is a plan you buy to protect yourself. It is not purchased through your employer or a group. You reach out to an insurance company, explore its different plans, and after selecting one that’s appropriate for you, pay a premium. The premium is paid monthly or annually, depending on your preference. In return, the insurance company provides coverage against your medical costs, such as doctor visits, tests, hospital stays, and medicines.

Under an individual health insurance policy, when you avail medical care services, you may first pay some costs yourself. This is a set amount, also known as a deductible. Insurance starts helping after you pay the deductible. You may also pay a small part of each bill, called a copay or coinsurance. After that, the insurance company pays the rest, based on your plan.

Different individual plans offer different levels of coverage and cost. You must choose one that fits your health needs and budget.

Benefits of individual health insurance

  1. If you have individual health insurance, you can enjoy the plan’s benefits as a single person.
  2. Individual health insurance is suitable for individuals with more significant health concerns or medical needs like hypertension, heart disease, cancer, and diabetes. This is because these insurance policies are usually customizable. So, you can get a health insurance policy covering your health issues if you research well.
  3. It may offer a broader network of healthcare providers based on your chosen policy.
  4. There is no upper age limit for renewing the policy, allowing continued coverage.
  5. When you choose an individual health insurance policy, you can claim tax benefits. For perspective, according to Section 80 D of the Income Tax Act 1961, the premium is deducted from your taxable income. This reduces your tax liability considerably.
  6. Many health insurance companies offer no-claim bonuses if insurers do not file an insurance claim for the financial year. This way, you get returns from your insurance despite not claiming it.

Limitations of individual health insurance

  1. While personal health insurance covers most health expenses, it doesn’t factor in all of them. For instance, co-payments or payments, like for doctor visits or prescription medications, may not be covered under your policy. Similarly, medical expenses at out-of-network hospitals or special procedures like cosmetic treatments or therapies may not fall under the purview of your policy. In such cases, you may be spending money out of your pocket despite having health insurance.
  2. If you want to offer health insurance coverage to your loved ones, you will need to get a family health insurance policy.
  3. If you do not have specific health concerns, you might be unable to maximize individual insurance policy features. This might mean you may pay a higher premium than the benefits you get.
  4. Individual health insurance policies may have a waiting period after which you can raise a claim for pre-existing health conditions. This means you can claim insurance coverage only when the waiting period ends.

What is corporate health insurance?

Corporate health insurance is offered by the organization to its employees. The biggest difference compared to individual health insurance is that the employer pays the premium here. This means that the insurance coverage will depend on the policy chosen by the employer. Note that some corporate health insurance policies may also include coverage for their family members, depending on the organization’s policies.

How does group health insurance work?

Group health insurance is a health plan offered to a group of people, usually by an employer, school, or organization. You join the group plan instead of buying insurance on your own. The cost is often lower because the risk is shared among many people. In most cases, the employer pays part of the monthly premium, and the employee pays the rest.

With corporate group health insurance, the plan helps cover medical expenses such as doctor visits, hospital care, medicines, and preventive services. When you use medical services, you may need to pay a small amount, like a copay or coinsurance. Some plans also have a deductible.

It is easy to join group plans. They offer basic coverage for many health requirements. As a result, they are a popular choice for professionals and their families.

Benefits of corporate health insurance

  1. Unlike individual health insurance policies, you need not wait for a specific period before you can avail of corporate insurance benefits.
  2. Processing claims for medical expenses is uncomplicated in the case of corporate health insurance. This is because companies typically have tie-ups with hospitals to streamline claim settlement.
  3. Depending on your company, the insurance may cover OPD, preventative healthcare, mental health, and more.

Limitations of corporate health insurance

  1. You will lose access to the corporate health insurance provided by your employer when you quit your job.
  2. Corporate health insurance plans are not customizable to fit your personal or family needs. They depend on your organization’s terms.
  3. Because corporate health insurance is tied to your job, switching jobs or experiencing a break in employment may leave you temporarily uninsured. Besides, it might be challenging to purchase individual health insurance due to coverage gaps.
  4. Unlike individual health insurance, corporate insurance offers no tax benefits.
  5. Some corporate insurance policies may not account for the hospitalization costs in metro cities. This means you might have to pay out of your pocket despite insurance.

Corporate health insurance vs Personal health insurance

Area of considerationCorporate health insurance policyPersonal/individual health insurance policy
Premium costThe premium cost of corporate insurance is usually low. Besides, the company covers these costs.The premium cost might be slightly high. Individuals usually pay for these costs from their savings.
CoverageThe coverage provided is limited.The coverage is comprehensive since most insurance companies allow customization.
CustomizationCorporate health insurance offers coverage based on your employer’s provided plan and cannot cater to your personal and family needs.Individual health insurance can be tailored to suit your specific medical needs.
No-claim bonus (NCB)Corporate insurance policies offer benefits only when you make a claim.You can enjoy the benefits of a no-claim bonus (NCB) on your individual insurance plan, depending on your policy.
Job limitationCorporate health insurance becomes invalid once you leave the company, and there will be no coverage after retirement from the job.Individual health insurance plans do not expire when you leave your job.

Corporate health insurance vs Personal health insurance: Which is better?

There is no right answer to the above question, because the best insurance policy for you depends on your needs.

So, compare plans from various providers to find the best fit for you. In this regard, Tata Capital Moneyfy can be your trusted partner.

We offer both individual and corporate insurance, provide the best offers, and make the application process easy for you. Visit the Tata Capital website to apply for your insurance or download the Moneyfy app from the Play Store or App Store.

How to choose the right health insurance policy?

  1. Personal circumstances and needs

Analyze your situation, including age, marital status, dependents, health condition, and pre-existing conditions, to determine which insurance provides all the required features. Ask questions like:

  1. Do I have any specific medical conditions that need special insurance coverage?
  2. Do I have any pre-existing conditions that may affect how quickly I can claim insurance?
  3. Do I have dependents that need insurance coverage?
  4. Does my employer (or my loved one’s employers) provide health insurance?
  5. Cost

Conduct a thorough cost analysis of premiums, co-payments, and out-of-pocket expenses for both individual and corporate health insurance. Consider your budget and choose the value for money option.

  1. Benefits and coverage requirements

Review and compare the benefits and coverage offered, including preventive care, hospitalization, medications, specialists, and additional dental and mental health services.

  1. Accessibility and convenience

Evaluate the network of healthcare providers, geographical coverage, claims processing, and customer service support each plan offers. Choose a plan that offers convenience and a seamless healthcare experience.

Read more about health insurance on the TATA Capital MoneyFy website.
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FAQs

What is the difference between corporate and individual health insurance?

Corporate health insurance is provided by an employer to employees. It is usually more affordable. Individual health insurance is bought personally and offers more choice and long-term coverage.

Can employees continue their corporate health insurance after leaving the company?

In most cases, company health insurance ends when you leave the job. Some insurers may allow conversion to an individual plan, but terms, benefits, and costs may change.

Is it advisable to have both corporate and individual health insurance policies?

Yes, it is advisable to have both policies. You can take care of basic healthcare requirements with corporate medical insurance. At the same time, you can use individual health insurance for extra protection, higher coverage, and continuity even if you change jobs.

How do tax benefits differ for individual and corporate health insurance policies in India?

Individual health insurance premiums qualify for tax deductions under Section 80D. Corporate health insurance premiums paid by employers do not offer direct tax benefits to employees.

What happens if you exhaust your corporate health insurance coverage mid-year?

If your corporate group health insurance limit is fully used, you must pay the remaining medical costs yourself. Alternatively, you can use your individual health insurance policy, if you have one.

Can dependents be covered under both policies at the same time?

Yes, dependents can be covered under both policies. In case of a claim, one policy is used first, and the other can cover remaining eligible expenses.

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