How Does a Group Health Insurance Differ from an Individual Policy?

How Does a Group Health Insurance Differ from an Individual Policy?

The global frenzy caused due to the pandemic has made everyone realise the importance of health reinforcing the ideology of health is wealth. It also made people realise that medical inflation has picked up and the hospital bills are no longer a minor expense. Hence, it is vital to buy a health insurance policy. Moreover, in 2020, there were many first-time buyers of health insurance plans.

When looking for one, there are various types of health insurance plan to choose from. But two most common types of insurance covers are group insurance policies and individual plans. If you want to know how both of them differ from each other, you’ve come to right place.

Group insurance plans

Group insurance plan, as the name suggests, is a policy designed to cover a group of individuals. These individuals may be associated to one common organisation. For instance, subscribers to a fixed deposit scheme. But the most common group policy that is available is in a corporate setting. Employers generally offer a group insurance policy as a perquisite over and above the salary compensation.

In a group insurance policy, the policy coverage is available to all such subscribers/members of the group however, it may be extended to dependents and family members. A group insurance plan primarily covers the hospitalisation due to accidents and illness. An amendment by the regulator also requires all existing group insurance plans to cover COVID-related hospitalisations too.

Here are some important things to know when you buy health insurance under a group insurance policy:

  • A group insurance plan originally is designed to cover the members of the group, but can be extended to cover family and dependents.
  • The coverage in a group insurance plan is broad and cannot be customised on every member’s need.
  • No medical check-up is required for a group insurance plan and hence minimising the chance of insurance coverage being declined.
  • Such plans are light on your wallet, but its coverage may change based on the acceptance of quote by the group.
  • The premium for such policies is either borne by the group or charged to the subscribers.

* Standard T&C Apply

Individual health insurance

Contrary to group insurance plans, an individual policy is limited for one beneficiary, i.e., the policyholder extending coverage for different ailments. Since the policy covers only one person, the coverage can be customised using different riders that an insurance company offers. In addition to that, there are various insurance plans that offer different covers like maternity coverage, day-care expenses and more.

Some essential pointers to know about individual insurance plans:

  • Individual insurance plans can be purchased by an individual. Thus, you can buy one for yourself as well as your family members, each of which is customisable to the insured person’s medical needs.
  • An induvial policy is issued based on an individual’s current health and hence a medical check-up is required in most cases.
  • Being customisable, the premiums for such plans are based on the coverage opted and other factors like age, existing health conditions and more.

* Standard T&C Apply

Both, individual as well as group insurance policies enjoy tax benefits as per the Income Tax Act,1961. For tax benefits under section 80D medical expenditure as well as premiums paid are considered as allowable deductions. However, remember tax benefit is subject to change in tax laws.

While these are some differences of the two types on insurance covers, it is best to combine both covers together. Since the coverage of a group policy ends with the end of your employment, an individual cover is independent of your employment status. Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.