Individual Insurance vs Group Insurance
Health Insurance

Individual Insurance vs Group Insurance

When it comes to health insurance, one of the most commonly asked questions is what’s the difference between group insurance and individual insurance.

While both types of health insurance policies serve the same purpose of providing cover against unforeseen medical expenses, they differ in terms of specifications and features.

If you are already covered under one type of health policy and want to know whether you should opt for the other as well, understanding the key points of difference between group insurance and individual insurance would help you make a decision.

Individual insurance vs Group Insurance

As the name suggests, an individual health insurance policy is a type of plan under which only one person/individual is covered. Whereas group health insurance plans, also known as corporate health insurance plans, cover all the members or employees of an organisation/company.

While anybody can buy individual policies for themselves or their family members, group health insurance can only be purchased by an employer or the main member of the group. Individuals cannot buy group health insurance policies.

How does group insurance differ from individual insurance?

When we talk of group health insurance vs individual health insurance, there are a number of parameters on the basis of which the two types of policies differ. Let’s take a closer look at how exactly they stack up against each other:

1) Premium Cost: The one feature that makes group health insurance plans extremely attractive is that their premium cost is usually much lower than that of individual health plans with similar benefits. That’s primarily because group policies are bought in bulk by the company, thereby helping the insurer spread its risk among a higher number of people.

2) Flexibility: Customers can get a lot of flexibility with Individual health plans as they can choose the desired sum insured, add-ons and the extent of coverage. However, with group plans, the sum insured and coverage depends on the plan chosen by the employer. Employees usually have no say at all on the kind of benefits they want from their health plans.

3) Coverage: Group health insurance policies mostly offer very basic coverage in terms of sum insured, or the diseases and illnesses covered. Sometimes, they may prove to be inadequate for you and your family, especially in case of severe and critical illnesses. Individual policies, on the other hand, can provide as much coverage as you want depending on how much premium you are willing to pay.

4) Validity: The biggest disadvantage of a group health insurance policy is that it is valid only till the time you are an employee of your company. After you resign or retire, the insurance policy would not offer you any coverage. Whereas, the individual health policy is valid for the entire policy term subject to timely payment of premiums.

5) Medical check-up: Another advantage of buying a group medical insurance policy is that usually there is no need for a medical check-up before the policy is issued to you. However, when buying individual health insurance plans, the insurer would definitely ask you to undergo a medical check-up in order to ascertain your fitness and thereby assess the risk levels before it issues you a policy and fixes the premium amount.

6) Claim process: Group health insurance policies usually witness a better and faster claim settlement procedure than individual plans. The process is much more streamlined for group plans as the company directly communicates with the insurer or third-party administrator (TPA) whenever the need arises and doesn’t let any paperwork or other hurdles come in the way of claim settlement.

7) Coverage for pre-existing diseases: Group policies usually offer policyholders coverage against pre-existing diseases from the first day itself after you pay your premium. Whereas, in individual policies, policyholders need to compulsorily complete the waiting period before filing any claim for a pre-existing disease.

Since both the types of policies have their own set of advantages and disadvantages, it is recommended that working or salaried class people already covered under a group health policy also consider buying an individual health plan in order to get a more comprehensive and long-lasting protection from any unexpected medical crisis.

Disclaimer: The above information is indicative in nature. For more details on the risk factor, terms and conditions, please refer to the Sales Brochure and Policy Wordings carefully before concluding a sale.

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