Group and individual health insurance policies: Check out how they differ

March 1, 2021 1:50 PM

Group insurance policies have lower premium as compared to individual policies since they are standardized for the whole group with uniform offerings.

Group insurance policies, individual health insurance policies, premium, features, benefits, differences, group coverThe benefits under an individual plan can be made for the specific individual, considering their medical history, budget etc.

By Dr. Sudha Reddy

COVID-19 has made us value our health more than ever before. It has also given us an idea of the extravagant medical bills that accrue when things go south and thus raising awareness for the need of health insurance. The latter half of 2020 saw many first-time buyers purchasing an insurance policy, and most of them opted for a health insurance policy. There are a variety of options available in the market regarding the different types of health insurance policy one can buy, the most common ones being an individual policy and a group insurance policy. Before buying either, it is advisable to know and understand which one can be the most useful for you.

A group health insurance policy is a type of insurance plan made for a group of people, the most popular example for it being for people who work in the same organisation or company. The coverage may even be extended to dependents and family members of the group. Primarily, group health insurance covers accident-related hospitalisation, illness-related hospitalisation. It may also cover COVID-related hospitalisation depending on the product chosen. Group Insurance Policies have lesser premiums as compared to individual policies since they are standardized for the whole group with uniform offerings and cannot be customized as per the requirements/health conditions of each of the members.

Here are important things to know about group health insurance policies:

  • Under a group insurance policy, the insurance may be extended to all members of the group.
  • The benefits of a group policy are broad and cannot be customized for specific members.
  • Under group insurance policy, no medical check-ups are prescribed by the insurance company, making the chances of insurance being declined minuscule as there is no risk selection.
  • Group health insurance policies are not very expensive however the coverages may change every year based on the quote acceptance by the group.
  • For group insurance policies, the premium is either borne by the group or charged from the member through their association with their group.

An individual health insurance policy on the on the other hand is customized for a single member to safeguard and cover oneself from various illnesses, hospitalization, child delivery expenses and other major and minor health conditions that may arise during one’s lifetime. While an individual health insurance is essentially designed for a single person, you can still customize your plan to cover for your dependents such as your senior parents, spouse, and children.

Here are important things to know about individual health insurance policies:

  • An individual health insurance can be availed of by an individual directly purchasing the policy for self and family.
  • The benefits under an individual plan can be made for the specific individual, considering their medical history, budget etc.
  • Under individual health insurance, the policy is issued depending on the individual’s current health, hence a medical check-up might be required based on the medical history.
  • For individual health insurance policies, the terms of the insurance contract shall remain constant, depending on the cover chosen by the insured and unless the Insured does not opt for changes at the stage of renewal
  • With individual insurance, the premium has to be paid by the insured.
  • With individual insurance, the policy is valid only for as long as the person pays the year’s premium amount.

The decision to buy an individual health insurance policy or be part of a group policy depends on how much coverage an individual is looking at. For a young individual, being a part of a group plan like a group health insurance policy by the employer might make sense as the premiums would be affordable. But for an individual with family, an individual health plan with enough coverage is advisable. So, the decision to stick to a group cover that you have got by virtue of being a member of a group vis-à-vis buying an individual health insurance plan for yourself and family should depend on your life stage, dependents and the overall coverage you should have.

(The author is Head – Health and Travel, Digit Insurance)

Do you know What is ? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Why you need to buy a health insurance policy
2Top 4 benefits of buying a car insurance policy online
3General insurance: No differential rates for similar risks, says Irdai