How is Group Health Insurance Better than an Individual Health Insurance Policy?

After the covid-19 outbreak, we have understood how uncertain our lives are. We have realized the importance of good health and how expensive it can be in case we need medical attention. This is where the role of health insurance begins. However, if you work at a company that covers you under a group health insurance plan then you should consider yourself lucky. Do you know why? We’ll tell you in this article but first, let us tell you about how group health insurance differs from individual health insurance policies.

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*Premium starting from ₹110/Employee/Month for ₹1 Lac Sum Insured covering Health & Wellness Needs (excluding GST)
#Premium may vary on the basis of coverage type & add-ons
**All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply

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Disclaimer: The above plans and premiums are for 1 Lakh sum per life per month covering Health and Wellness needs of 7 Employees, 5 Spouse & 2 Kids below 35 years of age. The premium is inclusive of GST and do not cover PEDs & Maternity. Standard T&C Apply PolicyBazaar does not rate, endorse or recommend any particular insurer or insurance product offered by the insurer.

Group Health Insurance & Individual Health Insurance

A group health insurance policy is an insurance plan that a company offers to its employees however one has to purchase an individual health insurance plan separately. A group health insurance plan usually covers employees as well as their dependents whereas individual health insurance provides coverage for the one who purchased it and in order to cover the family, you will have to purchase a family floater plan. This is the basic difference between both insurance policies.

However, there are many health insurance plans available in the insurance market. Although, selecting a health insurance policy that best suits your requirements is a difficult task, and you may get confused in selecting one.

Whether you should go for a group health insurance policy that your company offers or you should opt for an individual health insurance plan is a tough decision. However, here we are explaining these two so that you can make an informed decision:

Group Health Insurance - What is It?

It is a health insurance plan that is generally purchased for a group of people with the same interest like from an employer to its employees. An organization can either design its health insurance package or select a plan from many available packages that insurance providers sell.

In simple words, this type of insurance plan is specially designed to provide coverage to the employees and the members of their families. In family members of an employee his/her spouse, dependent children, and sometimes dependent parents are covered. A group health insurance plan provides optimum coverage to its employees that they need.

Key Advantages of Group Health Insurance

The key benefits or advantages offered by a group health insurance plan are as follows:

  • It Provides Cover for Hospitalization: The employees covered under a group health insurance plan are eligible to get cover for all in-patient expenses of hospitalization in case of any illness or accident. Most of the time the stay of the employee in a hospital should be for at least 24 hours.
  • It Offers Pre and Post-Hospitalization Expenses are Covered: A group health insurance provides coverage for all the medical expenses that incur 30 days before the hospitalization and 60 days after hospitalization.
  • It Offers Out-Patient Care: It also covers outpatient treatment expenses under some medical situations like kidney stone removal, eye surgery, eye surgery, tonsillectomy, etc.
  • It Covers Maternity Expenses: Most group health insurance plans cover maternity expenses as well.
  • No Waiting Period: You do not have to complete a waiting period for getting yourself enrolled in a group health insurance policy. You become part of group health insurance cover as soon as your company enrolls you in it.
  • Covers Pre-Existing Illnesses: There is no requirement to provide any medical tests before getting coverage of a group health insurance plan. Moreover, all your pre-existing medical conditions get covered from day one.

What is Not Covered in a Group Health Insurance Plan?

Here are the exclusions of a group health insurance policy:

  • AIDS, alcoholism, and drug abuse are not covered.
  • Dental surgery or treatments are not covered.
  • The cost of hearing aids and contact lenses is also not covered.
  • Treatments other than allopathic like Ayurvedic, Homeopathy, Naturopathy, etc. are not covered.
  • Diseases like sinusitis, hernia, cataract, piles, etc. are excluded.

Individual Health Insurance- What is It?

As the name of this plan suggests, it provides health insurance coverage for individuals. Under an individual health insurance policy, you get coverage against all sorts of medical expenses incurred at various stages of your life. For purchasing an individual health insurance plan, you select an insurance provider, choose one of its plans, set the premium, and buy. You can renew it next year. However, the coverage of this plan is limited to you only.

Key Advantages of an Individual Health Insurance Plan

Mentioned below are the key benefits or advantages that you get with your health insurance policy:

  • Expenses of the family are covered in one such policy.
  • Maternity cover is provided.
  • Tax benefits are offered under section 89C of the Income Tax Act.
  • It offers all-day care.
  • For every claim-free year, you get a cumulative bonus.
  • It provides pre and post-hospitalization cover.
  • Your health insurance cover may expand up to 50% of the sum assured if you have to get hospitalized because of an accident or illness.
  • The facility of cashless claim settlement across all the network hospitals of the insurer is provided.

What is Not Covered in An Individual Health Insurance Plan?

Here are the exclusions of an individual health insurance policy:

  • Pre-existing illnesses are not covered under an individual health insurance plan.
  • Dental treatment is also not covered.
  • Diseases that occur because of using drugs and congenital external diseases are not covered.
  • Primary diagnosis cost and cost of health tonics and vitamins are also not included.
  • Naturopathy treatment is excluded.

Costing of Both Health Insurance Plans

  • Group Health Insurance: Most employers purchase a group health insurance plan in bulk as they provide coverage through it to every employee. Therefore, the cost of a group health insurance plan is low. Moreover, if an employee decides to get additional advantages, then the charges are deducted from his/her salary.
  • Individual Insurance: This depends on many factors. Some individual health insurance providers consider the health levels and age of the policyholder, and some may consider location, disease, drinking, and smoking habits.

The Final Words!

There is no doubt that a group health insurance plan goes a long way if we address health-related issues. However, a group health insurance policy becomes useless as soon as you leave your job or get retired. In that situation, you will have to buy a health insurance policy for your family and yourself. The advantage of having an individual health insurance policy is that you can keep renewing it and get yourself and your family covered. So, it is up to you which insurance policy you want to have.

Written By: PolicyBazaar - Updated: 24 June 2022
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