How is Group Health Insurance different from Individual Health Insurance?

Health insurance has become necessary in recent years, whether due to the growing health risks, rising medical inflation, concerns over pre-existing medical conditions, or a desire to invest in the future. Considering this requirement, the government has mandated all professional organisations to provide health insurance to their employees. This is when new and old employees who probably have never heard of the term find out about group medical insurance.

 

However, while many know the importance of opting for a health insurance policy, there is often a lot of confusion surrounding the topic. What is group health insurance? How does it differ from individual health insurance policies? What is the scope and extent of coverage, premium cost, eligibility criteria, sum insured, etc.? 

 

Keep reading to learn all you need to know about group health insurance and its differences from individual health insurance. 

 

What is group health insurance?

Group health insurance is a specially designed plan that covers a group of people under the same plan. These policies provide the same coverage for all members regardless of age, gender, occupation, socio-economic conditions, and more. Under this policy, organisations can conveniently and cost-effectively provide coverage for all employees and customise the policy based on their needs.

 

What is individual health insurance?

An individual health insurance plan is paid for by the individual. If opted for a family plan, these plans provide coverage only to the policyholder and their families. Individual health insurance plans are not connected to the place of employment and can be bought based on personal choices.

 

How do group medical insurance plans differ from individual health insurance policies?

There are several key differences between group health insurance and individual health insurance. Understanding these differences is vital in determining the best option for you and your family.

 

Who is covered?

Group health insurance covers a group of people, typically company employees or association members. Individual health insurance, on the other hand, covers only one person or their family.

 

How much does a plan cost?

Group health insurance is typically cost-effective and less expensive for participants compared to purchasing individual health insurance plans for each member.

 

Who pays for the policy?

The employer typically partially or entirely sponsors the premiums for group insurance policies. In the case of individual health insurance policies, the individual pays the entire premium.

 

Who is eligible for the policy?

Employees are typically offered group insurance even with no pre-policy check-up and medical examination. For individual health insurance, the individual must apply for and may have to undergo a medical exam.

 

How customisable are the plans?

Group health insurance policies are fully customisable by the insurer depending on the organisation's needs. Individual plans, however, can be specific to the individual's needs rather than for dozens of people. Consult with a health insurance agent for more details on your policy.

 

Who is eligible for the tax benefits?

As group insurance plans are typically sponsored by employers, the tax benefits are given to the organisation. Similarly, the premium paid for individual plans by individuals can be tax deductible. 

 

Are group medical insurance plans enough for your needs?

While both policies benefit those covered under them, certain core differences between them can result in a varied experience. While an employee group insurance scheme offers unmatched convenience, cost-effectiveness, customisability, and extent of coverage, these plans are made to cover a large number of people. This is why the plan is not specific to any individual's needs and might not be enough in certain circumstance

 

On the other hand, individual plans might not be cost-effective because the employee pays for the policy themselves, and the premium is charged at a set price. However, these plans can be specially customised based on your needs while also giving tax benefits.

 

To answer whether group medical insurance plans are enough, consider whether the policy offered by your organisation covers your needs. If yes, then it is enough. If not, you can supplement your policy with an additional individual health insurance policy based on your and your family’s needs.

 

Conclusion

Group health insurance offers numerous benefits for employers and employees, making it an excellent choice for many organisations. However, individual health insurance may be better for some people, particularly self-employed individuals or those without access to an employer-sponsored plan. By understanding the differences between these two types of health insurance, you can make an informed decision for yourself and your loved ones.</p>

So make the right choice today and secure yourself and your family from the financial impact of medical expenses.