Last Updated on August 3, 2016 at 11:08 am
IRDA portability rules allow an individual to convert the group insurance cover offered by an employer to an individual policy from the same insurer. During the 6th Bangalore DIY investor meet (July 31st 2016), Mr. Srinivasan Sundarajan pointed out that he had made such a switch. When I requested him to recount his experience, pros and cons of converting a group cover to an individual health cover, he readily agreed. Over to him.
Switching Group Insurance to Individual Insurance – My experiences
Well, there comes a time in our career, when most of us decide to switch out of an organization. Many of us would have lived with the comfort that our organization took care of the risks – a group insurance policy for life, health.
Now when I step out of that comfort, what happens? More so when I decided to get out of the corporate world. This meant that there’s no new employer with a group insurance policy so to speak.
Well, I had been thinking for a while about stepping out of the corporate world. I had done my enquiries about the portability of my group insurance quite in advance. I got the confirmation, that it was possible to port it out when I leave the organization.
Join 32,000+ readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email! (Link takes you to our email sign-up form)
🔥Want to create a complete financial plan? Learn goal-based investing? Exclusive access to our DIY tools? Increase your income with your skills? Enjoy massive discounts on our robo-advisory tool & courses! 🔥
I had the cover for me, my wife and kids. In addition, the group insurance scheme allowed me to cover my mother, which I had opted for.
About two years before I left, the company had introduced an ability to increase the coverage, by paying an additional premium. I had availed of the same for my mother and my family. [Don’t get me wrong, my mother is an integral part of my family, as I see, but for the insurer and my company I guess it is different!!]
I initiated the porting through my HR organization. The process had to be initiated 45 days before the D-Day. I got connected to the officer in the insurance company, who was handling my company. He was a very able and helpful person. He gave me the options and the premium I had to pay for the various sum assured amount.
The first thing I found – I could have the cover for my family, at the level, I had in the corporate. There were no issues. The only thing is that the premium for an individual policy is definitely higher than the group cover.
Here is what I found next – I could not retain the full cover for my mother. The individual policy had a cap of 3 Lakhs. So I had to downgrade my mother’s cover from 10 Lakhs to 3 Lakhs! She’s a senior citizen, so I have to now live with the reduced cover. So the learning from this –
“If you can cover your parents with a super top-up outside, before they become old, please do so. You can still avail the base cover from your corporate. This way you can optimise your premium and also avoid having to reduce the coverage at their old age.”
As far as pre-existing ailments, there was no issue (not that it made any impact in our case). When the insurer issued my family floater policy and my mother’s policy, he marked the date when I was first insured over 10 years prior to that. So that took care of the IRDA 4 year rule for anything. This also meant there was no additional loading of any sort.
As far as no-claims are concerned, well there was nothing I could do about it.
The other thing I did was to ensure that I got my personal cover initiated about a week prior to my departure from the organization. After all, the whole purpose of insurance was to cover a risk, and I did not want to be in a situation where there was a gap between the expiry of my group cover and the start of my personal cover. This is the other recommendation I have for those of you who are planning to switch out – Have a small overlap rather than a gap, to avoid Murphy’s Law!
Please note, that this was my personal experience. I am not going to state that this is how every insurer will work. I will share in another blog, my experience after I had my individual policy in another blog…
=-=-=-=-=-=
Please join me in thanking Mr. Srinivasan for his kind generosity.
Now over to you. What are your impressions about switching corporate group cover to an individual policy from the same insurer?
Read more: : Health Insurance Portability: What you need to know before porting
🔥Enjoy massive discounts on our courses, robo-advisory tool and exclusive investor circle! 🔥& join our community of 7000+ users!
Use our Robo-advisory Tool for a start-to-finish financial plan! ⇐ More than 2,500 investors and advisors use this!
Track your mutual funds and stock investments with this Google Sheet!
We also publish monthly equity mutual funds, debt and hybrid mutual funds, index funds and ETF screeners and momentum, low-volatility stock screeners.
- Do you have a comment about the above article? Reach out to us on Twitter: @freefincal or @pattufreefincal
- Have a question? Subscribe to our newsletter using the form below.
- Hit 'reply' to any email from us! We do not offer personalized investment advice. We can write a detailed article without mentioning your name if you have a generic question.
Join 32,000+ readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email! (Link takes you to our email sign-up form)
About The Author
Dr M. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over ten years of experience publishing news analysis, research and financial product development. Connect with him via Twitter(X), Linkedin, or YouTube. Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (CNBC TV18) for DIY investors. (2) Gamechanger for young earners. (3) Chinchu Gets a Superpower! for kids. He has also written seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation promoting unbiased, commission-free investment advice.Our flagship course! Learn to manage your portfolio like a pro to achieve your goals regardless of market conditions! ⇐ More than 3,000 investors and advisors are part of our exclusive community! Get clarity on how to plan for your goals and achieve the necessary corpus no matter the market condition is!! Watch the first lecture for free! One-time payment! No recurring fees! Life-long access to videos! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence.
Our new course! Increase your income by getting people to pay for your skills! ⇐ More than 700 salaried employees, entrepreneurs and financial advisors are part of our exclusive community! Learn how to get people to pay for your skills! Whether you are a professional or small business owner who wants more clients via online visibility or a salaried person wanting a side income or passive income, we will show you how to achieve this by showcasing your skills and building a community that trusts and pays you! (watch 1st lecture for free). One-time payment! No recurring fees! Life-long access to videos!
Our new book for kids: “Chinchu Gets a Superpower!” is now available!
Must-read book even for adults! This is something that every parent should teach their kids right from their young age. The importance of money management and decision making based on their wants and needs. Very nicely written in simple terms. - Arun.Buy the book: Chinchu gets a superpower for your child!
How to profit from content writing: Our new ebook is for those interested in getting side income via content writing. It is available at a 50% discount for Rs. 500 only!
Do you want to check if the market is overvalued or undervalued? Use our market valuation tool (it will work with any index!), or get the Tactical Buy/Sell timing tool!
We publish monthly mutual fund screeners and momentum, low-volatility stock screeners.
About freefincal & its content policy. Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on mutual funds, stocks, investing, retirement and personal finance developments. We do so without conflict of interest and bias. Follow us on Google News. Freefincal serves more than three million readers a year (5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified with credible and knowledgeable sources before publication. Freefincal does not publish paid articles, promotions, PR, satire or opinions without data. All opinions will be inferences backed by verifiable, reproducible evidence/data. Contact information: To get in touch, use this contact form. (Sponsored posts or paid collaborations will not be entertained.)
Connect with us on social media
- Twitter @freefincal
- Subscribe to our YouTube Videos
- Posts feed via Feedburner.
Our publications
You Can Be Rich Too with Goal-Based Investing
Published by CNBC TV18, this book is meant to help you ask the right questions and seek the correct answers, and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now.Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want
This book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at a low cost! Get it or gift it to a young earner.Your Ultimate Guide to Travel
This is an in-depth dive into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, and how travelling slowly is better financially and psychologically, with links to the web pages and hand-holding at every step. Get the pdf for Rs 300 (instant download)