Chapter 7 of 12
How to Choose a Health Insurance Plan
Network hospitals, room rent, waiting period comparison.
Anita had been with the same employer for six years and had never bought personal health
insurance — her company provided a ₹3 lakh group cover. When she was diagnosed with
thyroid cancer at 36, the treatment cost ₹9 lakh. Her employer covered ₹3 lakh. She was
left with ₹6 lakh to arrange herself. Three months later, she was let go in a corporate
restructuring. Not only did she lose her job, she lost her insurance — right when she
needed it most and right when pre-existing disease waiting periods would start from scratch
on any new policy she bought. Anita's experience is unfortunately common. Choosing health
insurance correctly, and maintaining continuity, can make the difference between financial
survival and financial ruin.
Should You Rely on Employer Health Insurance?
| Factor | Employer Group Insurance | Individual/Family Policy |
|---|---|---|
| Cost to you | Usually free or subsidised | You pay full premium |
| Coverage amount | Typically ₹2–5 lakh (low) | You choose — up to ₹1 crore+ |
| Family coverage | Often available for extra premium | Included in floater option |
| Portability when leaving job | Policy ends when job ends | Yours for life |
| Pre-existing disease waiting | None (covered from day 1 in group) | 3–4 year waiting period |
| Policy control | Employer decides terms | You choose features and insurer |
| Continuity of cover | Lost if unemployed or job change | Continuous as long as you renew |
| NHCX data portability | Linked to employer | Linked to your UID |
Employer health insurance is a benefit, not a strategy. You lose it the moment you change jobs, get laid off, or retire. If you have a health event near a job transition, you may find yourself uncovered during treatment and starting fresh waiting periods. Buy a personal policy alongside your employer cover — even a basic ₹5 lakh individual policy provides continuity and a starting point to build on.
Key Terms Before You Compare Policies
10 Questions to Ask Before Buying Any Health Policy
Is my city's best hospital in the network? Check specifically whether major hospitals in your city (Apollo, Fortis, Manipal, AIIMS, etc.) are in the insurer's network list. If not, you'll face reimbursement claims for every hospitalisation.
What is the room rent policy? Is it unlimited, single private room, or a sub-limit? (See Chapter 6 — sub-limits are dangerous.)
What is the pre-existing disease waiting period? Standard is 3–4 years. Some newer policies like HDFC Optima Secure offer 1-year PED waiting. Crucial if you have conditions like diabetes, hypertension, or thyroid.
Is there a co-payment clause? Any co-payment above 10% significantly reduces coverage value, especially for large claims.
What are the sub-limits on specific treatments? Some policies have sub-limits for cataract surgery (₹20,000), knee replacement (₹80,000), etc. Check these.
Does it have restoration benefit? If sum insured is used up in one hospitalisation, does it restore for remaining incidents in the same year?
What is the Claim Settlement Ratio (CSR) of the health insurer? Star Health, HDFC ERGO, Niva Bupa — check their health-specific CSR, not life insurance CSR.
How is the TPA/in-house claims process? In-house claim settlement (without TPA) is often faster. Check average claim settlement time.
Does it cover OPD or outpatient costs? Some premium policies cover doctor consultations, diagnostics, and pharmacy costs outside hospitalisation.
What are the annual premium increase history and renewal terms? Some cheap policies aggressively increase premiums at renewal. Check 5-year premium trend.
Policy Portability — Don't Lose Your Waiting Period Credit
IRDAI's portability rules mean you can switch health insurance companies without losing the
time already served toward your pre-existing disease waiting period — as long as you port
before your policy lapses.
Anita has held a group employer health policy for 4 years. She has thyroid disease (a
pre-existing condition). Standard pre-existing disease waiting period for new policies: 4 years.
- If she ports to an individual policy before leaving her job: IRDAI rulesallow her to carry forward 4 years of waiting period credit
- Since standard PED waiting is 4 years, she gets immediate coveragefor her thyroid condition in the new policy
- If she waits until after losing her job and lets the group policy lapse:New policy → 4-year waiting period starts from scratch → thyroid not coveredfor 4 years
Key lesson: Port your policy BEFORE the old one lapses. Once it lapses, you lose all waiting period credit and start over.
If you're changing jobs, initiate the portability process at least 45 days before your employer policy renewal date. Apply to the new insurer with your existing policy details and request portability. The new insurer must honour the existing waiting period credits as per IRDAI regulations.
What does health insurance portability allow you to do?
Key Takeaways
- Never rely solely on employer health insurance — you lose it with your job, leaving you uninsured at the worst possible time
- Check 10 key criteria before buying: network hospitals, room rent policy, PED waiting period, co-payment, sub-limits, restoration, CSR, claims process, OPD cover, and premium history
- Port your policy before it lapses — IRDAI portability rules let you carry forward pre-existing disease waiting period credits to a new insurer
- NHCX is India's digital health claims exchange that enables faster, more transparent claims — choose insurers already connected to the system