Is It Enough to Have a Group Health Insurance or Should You Buy an Individual Health Insurance?

Standing where we currently are both economically and sociologically, it is perhaps a little redundant to talk about the benefits that health insurance policies can bring for an individual. By now, most of us know why we should have a comprehensive healthcare policy in place.

But, what we don’t know is whether having a group insurance policy is enough to remain financially sound against medical risks, or do we need an additional individual policy as well.

To know more, let us begin right at the onset of what each of these policies entails.

What is a Group Health Insurance Policy?

A group health insurance is a package healthcare plan that is purchased by an organisation for its employees. These policies can either be customised according to the company’s requirements or can be a pre-planned policy offered by an insurance company.

Companies offer group health insurance policies to –

  • Protect their employees from severe health conditions
  • Increase their employee retention.
  • Take care of their mental wellbeing.
  • Motivate their employees by making them feel secure and satisfied.

What is an Individual Health Insurance Policy?

It is quite self-explanatory!

An Individual health insurance cover provide financial protection to the policyholder and his/her family against medical emergencies. This type of insurance policy provides individual sum assured that can be availed by you or your family members for purposes like –

  1. Accidental or illness related hospitalisation.
  2. Pre and post-hospitalisation expenses.
  3. Daily hospital cash cover.
  4. Regular health check-ups.
  5. Treatment of psychiatric illnesses.
  6. Benefits like surgery cost coverage, AYUSH treatments, etc.
  7. Add-on covers like maternity care cover, critical illness care cover, etc.

Now, after looking through the benefits provided under each cover, you might be thinking – what is the difference between these two?

Don’t worry, we have got you covered!

Difference between Group and Individual Health Insurance Policies –

To make it easier for you, we have illustrated the difference between the two in a table –

Parameter Group Health Insurance Individual Health Insurance
Cost More cost-effective than individual covers, with it being available to employees at low or no cost.

Employees don’t have to pay any additional fees unless they opt for an add-on cover with additional benefits.

They are more expensive. With individual plans, policyholders will have to bear the expense of premium payment, plus the cost of any add-on cover that they might avail.
Customisation Since this policy is offered in groups, it cannot be customised according to each individual’s requirements. You cannot select the plan that you specifically want for yourself or your family. You can choose the plan at your discretion and as per your requirements.
Policy approval When it comes to group insurance, there is no chance of you being denied of a policy, as each individual’s policy is approved under the package. Even though it is uncommon, an insurance company might deny your insurance package citing any financial or medical reason. With this policy, the policyholder’s medical history is examined closely.
Premium price determinant Since the risk factor for this policy is spread across different employees, the renewal premium for the policy is higher than other plans. Since this policy covers only you and your family members, the renewal premium depends solely on your medical and financial history.
No Claim Bonus The facility of No Claim Bonus is not available under group health insurance plans. If you do not raise claims in the previous policy terms, you can avail a discount in the form of No Claim Bonus for your succeeding policy term.

Apart from these, sometimes under group health insurance policies, if one employee does not raise any claims, but another does on the grounds of critical illness, having a baby, etc. the overall cover extended to the entire group can be reduced. This can happen if the employer refuses to pay the additional premium to cover such costs.

So, Which One is Better Among the Two?

As you can see from the table illustrated above, each of these insurance policies offers their fair share of benefits. But, whereas group insurance plans can be cost-saving for the employer of a company, individual insurance plans are a necessity for even those under a group plan.

This is primarily because the individual policy caters to you and your family’s requirements. Further, group health insurance plans are applicable as long as you are employed with the company. They become redundant as soon as you leave your job (even though they can be converted for a high premium payment).

That is why it is best to get an individual health insurance policy, early on in your life, as because these policies can be hard to avail post-retirement!