If you have been banking only on the group health insurance policy provided by your employer, you may be in for a jerk. Insurers are pulling out of contracts with companies. In some cases, they have increased the premiums, forcing companies to cancel their contracts and explore for new insurers. While most companies have taken group covers from another insurer, some have withdrawn health insurance benefits for their employees.

While some companies of the insurance industry cite the slowdown as the reason for these developments, others attribute it to weak underwriting. Insurance companies underwrote group health insurance at unsustainable premiums in the past, making the business unviable. The reasons will get clearer as the story unfolds, but the crisis has underscored the importance of having an individual health plan even if you are covered by a group health policy.

Group health insurance comes enriched with lots of benefits. An Individual policy starts giving one month after it begins. But a group policy may waive this waiting period and insure policyholders from the day the cover is bought. It may also waive the waiting period for pre-existing diseases and include maternal care and a family floater in the policy.

You should not take portability for granted. Some benefits like waiver of the one-month waiting period required for the fresh individual policies may be transferred from a group to an individual policy, if there is no change in the insurer. On the other hand, portability is decided on a case-to-case basis and it is not governed by strict rules and regulations. Sanjay Datta, the head of customer service and health and accident in ICICI Lombard General Insurance, clarifies this, "We underwrite the group as a whole in a group policy," he says. "Hence, we can give extra benefits like maternity cover. However, while insuring an individual, covers can only be designed on a standard portfolio basis. This makes it difficult to cover the set of covers enjoyed by a group policyholder."

Negotiate portability of benefits to individual cover with your insurer before the group cover expires. Chances of success are almost nil if you seek transfer of benefits after the group cover expires. Deepak Mendiratta, the managing director of health and Integrated, a health solutions provider, says, "Even a break of a day can be considered as a break in the policy. You can ask your insurer to renew the policy after a break of up to 14 days."

You should buy health cover early in life. It is advisable to keep yourself insured at all times. Having an individual policy helps even if you feel that your company may provide health insurance again later or if you are moving to a new job. Is a good policy to buy health insurance early in life—you get no-claim bonus and any ailments that happen later get covered?

If you decide to purchase a health insurance plan late in your life, then finding a suitable cover for yourself can become very difficult. You may have to pay higher premiums and also have to undergo a medical examination to prove to the insurance company that you are healthy. Another disadvantage of purchasing an insurance plan late in life is that existing diseases would not be covered. So you should purchase health plans as soon as possible.