Individual Insurance or Group Insurance, What Should You Choose?

Most insurance companies offer individual health insurance and group health insurance policies. Browse through insurance websites and you notice they are divided into two distinctive groups. You might think they are similar, with features almost running through each other, however these policies have distinct nuances that every individual should understand. Choosing the best type of policy for your requirement should be your priority. However if you are contemplating between individual health insurance and group insurance, we advise you check its features before. A similar thread between these two types of policies is the coverage they provide.

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Whom do you want to insure?

  • Employee, spouse & kids

  • Employee only

They differ in certain other details that you as an individual should consider. Small companies looking for group health policies for their employees should also assess these polices especially with regard to employee and tax benefits. 

Confounded with which type of policy will suit your need? Understanding these policies first hand will give you a better understanding of what these policies are, how beneficial they are and if its meant for you.

Let’s first understand what individual health policies and group policies are:

Individual Health Insurance Policy:

As the name itself suggests, these are policies for the individual investor. The individual investor can purchase a policy for themselves or for their family, depending on their requirement. Although individual policy does suggest that the insurance package is for a single person (insured), it could cover a small group of people (the insured’s family).

Group Health Insurance Policy:

This is a complete package a company purchases to insure its employees. Group policies can be tailor made to suit the company’s requirement or the company can choose a pre-defined group health insurance plan.

There are a few differences that set these two policies apart, knowing them will help you understand them better.

Cost Factor- Unlike group policies, premium for individual policies are much higher. The premium is borne by the individual. Group policies are cheaper as they work on the same principle, which is; bulk purchases always attract huge discounts. Since group policies are what company’s choose for their employees, the premium is subtracted from the employees salary. 

Convenient purchase - Before the insurance policy is approved, the individual usually has to undergo medical tests and their financial history is scanned. The insurance company can deny the individual the policy citing either medical reasons or unhealthy financial background. On the other hand, group polices are much easy to attain. Since these are purchased by the company, there is minimal medical and financial thresholds to be met. 

Flexibility - In an individual policy the policy holder has complete control on how they would like their policy to work for them. The individual can choose their policy terms as well as choose to terminate the policy when found appropriate. Whereas, in group policies the individual has no choice but to accept the predefined plan that the company chooses. The policy terminates when the employee leaves the organisation. 

No claim Bonus - If the individual policy holder does not make a claim on their policy through the entire tenure, the policy holder receives a No Claim Bonus. This is how the insurance company rewards the individual for living a healthy life. The bonus can be an increased cover at the same premium cost or discount on premium that is renewed. Group health insurance policy if unclaimed does not give the insured any benefit or bonus. 

After Retirement - Your group policy is beneficial only till as long as you are associated with the company. Post retirement you do not receive any benefits, as in health coverage or monetary benefits for you and your family. Individual policy premiums are much higher and this is because the policy gives the individual enough cover even after retirement. However if your group policy is excellent you can always convert it to an individual policy. The premium on your policy post conversion will increase.

It goes without saying that although group polices are excellent for companies, it is advisable that individuals buy their own policy bereft of the organisation they work in. An individual policy is a necessity as it gives you complete coverage as well as takes care of your family’s financial need after your death.

The individual policy also helps you design your policy as per what you want as coverage, premium payment, critical illness covered, number of family members covered, etc.

For those contemplating on buying an individual policy as they already have a group health insurance policy, we recommend you take the plunge. An individual policy may eat into your income a bit, but the benefits are too hard to ignore.

You can choose an individual health policy that suits your requirement along with having a group policy as your individual policy will continue post retirement or change in company, unlike your group policy.


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Policybazaar for Business - Group Health Insurance - Customer Reviews
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Based on 189 reviews
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3.8 April 09, 2023
Excellent Support
It was easy to buy insurance from PolicyBazaar website and customer support was also amazing to clear all the doubts.Thankyou. Highly worth it.
4.3 April 01, 2023
Necessary Investment
It is a good and necessary investment. Thanks PB.
4.3 March 24, 2023
Provides Satisfactory Results
I purchased Group health insurance at policybazaar recently and i am so much satisfied with the plan. The application process was smooth and efficient, making the typically tedious task of getting insurance surprisingly hassle-free.Thanks PB.
3.8 March 16, 2023
Helpful In Making Decisions
When it came to selcting the right Group Health Insurance, Policybazaar offered an impressive range of options from reputable insurers. I appreciated the comprehensive details avalable for each policy which helped me to take the better decisions. Thankyou.
4.3 March 15, 2023
Increases Clients Expectations
I recently had the pleasure of securing a Group Health Insurance policy throug PolicyBazaar and I must say the Entire process exceeded my expectations! From start to finish, their service werw great. Thankyou.
3.8 March 02, 2023
Great Experience
I got great deals on PolicyBazaar website. Highly recommend.
4.3 February 17, 2023
Excellent Purchase
It was a excellent purchase at PolicyBazaaar. Thankyou team.
4.3 February 04, 2023
Prompt Services
Policybazaar's efficient claims process was impressive. In case of any medical emergencies, my employees were able to get their claims settled swiftly, allowing them to focus on their health and recovery without worrying about financial aspects.Thankyou
4.3 January 22, 2023
Budget Friendly Purchase
Thankyou PolicyBazaar for providing such a great plan at affordable premium rates. It was a budget-freindly purchase.
4.3 January 09, 2023
Multiple Range Of Benefits
I purchased Group health Insurance which offered me plans with affordable rates Thankyou PB.