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Group Health Insurance or Individual Health Insurance: Which is better?

As people are living through this deadly COVID-19 pandemic for more than 1 year, they have understood the importance of having a comprehensive health insurance policy. A health insurance policy will give you financial assistance in case of healthcare emergencies that can knock at any time.

Group Health Insurance or Individual Health Insurance Which is better

Health insurance also abolishes all mental stress and agony that comes along with a medical emergency. You may be confused with whether you should purchase an individual health insurance policy or go ahead with group health insurance plans. Which of these two would be better for you? Let’s discuss.

What is a Group Health Insurance Plan?

A group health insurance plan is offered by the employer to its employees at the time of joining the organization. This type of insurance compensates for all healthcare expenses for you and your family during the tenure you work for the company. Group health insurance plans offer you some added advantages that you may not get with your individual health insurance.

Why is Group Health Insurance Beneficial?

Employees don’t need to pay Premiums 

Since a company offers group health insurance to its employees, hence all premiums are paid by the company. This means you are getting health insurance free of cost.

Covers the employee and his/her family

A group health policy will not only cover an employee but also offers coverage to the employee’s spouse, children, and sometimes even parents.

No Waiting Period

Once you are covered with a group health plan, the waiting period for hospitalization is waived off. This means you are getting coverage from day 1.

No Medical Check-up

No medical check-ups are required before enrolling in a group health insurance plan,

Pre-existing illnesses are covered

All group health plans offer coverage for pre-existing diseases from day 1.

Support in times of sudden Medical Emergencies

In the case of healthcare emergencies, group health insurance plays a pivotal role. If an employee or his/her family members experience a sudden medical emergency, then this plan will offer them the best quality treatment for their diseases/injuries.

Performance and Morale-Boosting

Companies offer this health insurance plan to boost up the morale of all employees. Employees can now focus on their work as their healthcare needs are taken care of by the company.

Some disadvantages of group health insurance

Does not offer Adequate Coverage

Most group health insurance plans offer coverage between Rs.2 to Rs. 5 lakhs. But in this fast-moving world and the pandemic around, this amount is not adequate for all your healthcare expenses. Moreover, medical inflation is also increasing day by day. To cope up with health emergencies and medical inflation, your health insurance coverage should be at least 6 times your monthly salary.

Not Applicable if you leave the Organization

If you leave your present organization, then your group health insurance policy will not be effective anymore.

No Coverage after Retirement

A corporate health insurance plan will never offer you any coverage after your retirement.

What is Individual Health Insurance?

An individual insurance policy offers adequate coverage to you and your family members. You can purchase personal health insurance for yourself and your family members (a family floater policy).

Health Insurance

You are eligible for tax deductions for all your paid premiums against your individual health policy.

Difference between Individual Policy and Family Floater

As the name suggests, an individual health policy offers coverage to a single person. But a family floater policy offers coverage to all members of the family under a single plan. In a floater policy, the sum insured is shared between all family members. For example, if you have purchased a policy of Rs. 5 lakhs (the sum insured amount is Rs. 5 lakh), then you will only get benefits up to Rs. 5 lakhs during the policy tenure period. A family floater plan offers coverage to all family members. If you purchased a floater policy of Rs. 10 lakhs, then this amount will be shared by all family members.

Don’t include your senior parents under your family floater plan. Since they are more susceptible to various diseases, thus, your premium amount will increase. The experts always recommend purchasing a separate health policy or a senior citizen health plan for your elderly parents.

Can I buy Health Insurance directly from an Insurance Company?

You can purchase a personal health insurance plan from an insurer either online or offline.

Can I buy Health Insurance directly from an Insurance Company

By visiting the website of the insurance company, you can compare individual health plans and purchase the best one that meets all your requirements.

Group Health Insurance Vs Individual Health Insurance

Parameters

Group health insurance

Individual health insurance

Definition

These types of plans are offered by employers to their employees Anyone can purchase an individual health insurance plan to enhance protection and security
Control As these plans are purchased by employers, hence, insured people have limited control

A policyholder can fully control both coverage and add-ons

Sum Insured

Lower sum insured (Rs.2-5 lakh) A policyholder can select the sum insured amount as per his requirements
Eligibility criteria Should be an employee of an organization

Anyone above 18 years

Coverage for pre-existing diseases

From day 1 Coverage only after the waiting period is over
No claim bonus Not applicable

Applicable

Medical check-ups before purchasing the policy

No For a higher insured amount, you may need to go through medical check-ups
Add-ons None or limited

Policyholders can purchase add-ons as per their requirements

Tax benefits

Yes

Yes

 

The Conclusion

Both individual and group health insurance plans have different purposes and embrace customers with different benefits. Whatever may be the difference between group and period insurance plans. At the back is the aim of meeting your healthcare needs in the case of medical emergencies.

Always purchase a health insurance policy that will give you monetary assistance in case of unwanted medical emergencies. A person should be covered under an Individual plan, a group health plan from the employer (if applicable), or family health insurance plan, and a critical illness plan to stay protected against various diseases.

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