An individual health insurance policy is worth buying alongside your group insurance cover. While group coverage offers financial protection during your employment, it may end when you leave your job, and the coverage terms are decided by your employer.
Why Buy Individual Health Insurance Over Group Health Insurance?
Your employer's group health insurance is a great benefit, but it shouldn't be the only coverage you depend on. Here are some of the biggest reasons to have your own health insurance policy:
- Your health insurance stays with you: If you change jobs, your individual health insurance doesn't end. As long as you keep renewing the policy, your coverage continues wherever you work.
- You can choose the cover that suits you: With an individual policy, you're the one making the decisions. You can choose the sum insured, add-ons, deductible, and other features based on your needs instead of using the cover selected by your employer.
- Your coverage does not get interrupted due to career changes: Changes in career, breaks in career, being self-employed, or becoming retired will have no impact whatsoever on your individual health insurance plan.
- There are benefits to buying early: The more you hold your policy, the earlier you will get out of the waiting period and enjoy the continuity benefits, which might help you in the future.
- You can provide coverage to your family members as per your wish: You can go for an individual cover for yourself, or else you can buy a family floater cover and provide cover to your loved ones.
- You can continue to hold your policy even post-retirement: Your individual health insurance is not discontinued when you retire from your job. As long as you continue to pay your premium and fulfil the requirements of the policy, your insurance policy will remain active.
- You have the option of changing insurers: In case you are not satisfied with your present insurer, you can switch your policy to a new insurer through portability.
Individual Health Insurance vs Group Health Insurance: A Quick Comparison
Here is how the two compare on the factors that influence your health insurance experience.
| What matters | Individual Health Insurance | Group Health Insurance |
|---|---|---|
| Who owns it | You do | Your employer does |
| Does it continue if you leave the job? | Yes, it stays with you | No, it usually ends when your employment ends |
| Who controls the sum insured? | You choose it | Your employer decides it |
| No-claim bonus (NCB) for you | Yes, you can build and retain it, subject to policy terms | No personal NCB accrues to individual employees |
| Cost to you | You pay the premium | Often paid by the employer, though employee contributions may apply in some cases |
| Does it continue after retirement or career breaks? | Yes, subject to premium payment and policy terms | No, it is generally linked to your employment |
Sum insured is the maximum amount your policy will pay for covered medical expenses during a policy year. No-claim bonus (NCB) is an increase in coverage or a premium benefit that may be earned for claim-free years, subject to policy terms.
The gap that catches people out
If you rely only on employer cover and leave your job at 45 with a newly diagnosed condition, a fresh individual policy bought afterwards will apply its standard waiting periods (commonly up to 3 to 4 years for pre-existing diseases) before that condition is covered. An individual policy bought years earlier would already have cleared those waiting periods.
Should You Wait Until You Leave Your Job to Buy an Individual Health Insurance Policy?
No. If you buy your first individual health insurance policy only after leaving a job, especially later in life, you may face higher premiums, health-based loadings, or waiting periods for certain conditions.
A loading is an additional premium charged based on factors such as age, medical history, or health risk. Buying health insurance earlier, while you are younger and healthier, may help you secure coverage on more favourable terms.
How Can an Individual Health Insurance Policy Help You Save Tax?
The premium you pay for an individual health insurance policy may qualify for a tax deduction under Section 80D of the Income Tax Act, which can help reduce your taxable income.
By contrast, the premium paid by your employer for group health insurance usually does not give you this benefit because you are not the one paying it. With an individual policy that you pay for yourself, you may be able to claim the deduction, subject to the applicable tax rules.
So, an individual health insurance policy can offer both tax benefits and coverage that stays with you for the long term. That is one reason many people choose to keep one even when they already have group cover.
Key Takeaways
- Group coverage is related to your employment; on the other hand, individual health insurance will remain with you, irrespective of whether you quit your job, retire or take a sabbatical.
- There is more freedom when it comes to selecting an individual health insurance plan. You will be able to decide upon the sum assured, the add-ons and the insurer of your choice.
- Early purchase can prove to be a wise decision, as it allows you to fulfil the insurance waiting period well in advance before you need the coverage.
- An individual health insurance plan also offers tax benefits under Section 80D of the Income Tax Act.
Frequently asked questions
No. Group cover usually stops when you leave your employer, whether due to resignation, retirement, or termination of employment.
About the authors
Neviya Laishram
Written by · Senior Editor – Health, Life and Group Health Insurance Content at ACKOWith a journalism background, she brings 9 years of experience in strategising and editing health, life, and group health insurance content. Having written for magazines and digital publications, she combines research and editorial expertise to create credible, useful content for readers.
Dr Nitin Kumar Gupta
Reviewed by · SVP – Health Underwriting & Claims at ACKO General InsuranceWith 20+ years of experience in digital transformation and growth, he is a leader specialising in health, life, accident, and disability insurance. Backed by an MBBS degree and insurance designations (FLMI, FALU, FLHC, ACS, ARA), he combines expertise with leadership.
