Group Health Insurance vs Individual Health Insurance

By | February 12, 2016

Group Health Insurance vs Individual Health Insurance

‘It is health that is real wealth and not pieces of gold and silver’—Mahatma Gandhi.

So, don’t even think of ignoring your health! One way to make sure you’re protected is by opting for Health Insurance. You can rest easy knowing that you’ll be covered if you find yourself faced with a medical emergency. Even if you’re hale and hearty now, you never know what the future has in store.

However, choosing the right type and amount of Health Insurance can be quite tricky especially if you’re already covered by a group insurance policy by your employer. The question is, is this really enough? Should you also apply for an individual cover over and above this? Confused? Don’t worry, we’re right here to help you make an informed decision. Let’s start with what understanding what group Health Insurance and individual Health Insurance mean.

What is group Health Insurance?

Group Health Insurance is typically offered to the employees of a company as part of their salary package. The members of a group insurance policy are offered certain fixed and uniform covers. For this kind of insurance, the premium amount tends to be lower as the cumulative health risk of all members is taken into account while calculating the premium cost. Since not all employees of a company are likely to fall sick at the same time, the risk factors are taken care of. Once an employee leaves the company, he will no longer enjoy the benefits of group insurance from that company.

What is individual Health Insurance?

As the name indicates, individual Health Insurance is designed to cater to the needs and requirements of an individual. Number of family members, medical history, age, income and other factors are taken into account while calculating the premium amount. The premium amount is higher compared to group insurance and is fixed at the time of buying the insurance. The individual needs to pay the premium amount monthly, quarterly or yearly and he can choose the tenure of his policy.

Differences between group and individual Health Insurance

Speaking of differences, there are quite a few which are listed below:

  • Cost: The premium amount of an individual insurance policy is without a doubt higher than that of a group insurance policy.
  • Flexibility: While individual insurance lets you choose the terms of the policy as per your requirements, group insurance will only cover you for basic medical emergencies as pre-determined and agreed upon by the company. You do not enjoy the freedom to customize your Health Insurance policy as per your needs under a group insurance cover.
  • No Claim Bonus: If you do not make any claim in a year under the group insurance policy, you do not get any benefit. But with individual policies, in case  no claims have been made throughout the policy tenure, you can enjoy a No Claim Bonus, which is like a reward for being healthy.
  • ConvenienceIn certain scenarios, an individual may find that he is not eligible for a health insurance policy because of medical or financial history issues. This is never the case with group insurance, as every employee of the company is automatically granted approval for the insurance package offered by the company.
  • Retirement Concerns: If you are only covered under group insurance, then post retirement you won’t have any coverage. Getting an individual cover post retirement is not easy and comes at a much higher cost. This problem will not occur you have an individual insurance policy.

It’s always advisable to have an individual Health Insurance policy even though you are covered under a group insurance policy. So even if the premium amounts seem a little high for individual policies, it’s still the safer and smarter choice! Remember, ‘Health is wealth.’

If you’re looking for a Health Insurance policy, we’ve got plenty of options to choose from!

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Category: Health Insurance Insurance

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