Difference Between Individual and Group Health Insurance: Which is Right for You?

What is Individual Health Insurance?

An individual health insurance policy covers the medical expenses of an individual only. This type of policy is purchased by individuals and families. The policy is issued to the person buying the policy, who becomes the policyholder.

What is Group Health Insurance?

A group health insurance policy covers the medical expenses incurred by a group of people. This type of health insurance policy is usually purchased by employers, cooperative societies or groups for its employees or members. While the policy is issued to the employer or the group secretary, the coverage is offered to all its members.

Individual Health Insurance vs Group Health Insurance

Check out the following table to know the difference between individual health insurance and group health insurance plans:

Categories	Individual Health Insurance	Group Health Insurance
Meaning	Offers coverage to an individual	Offers coverage to a group of people
Who Can Buy?	One individual	Employers, groups, cooperative societies
Who is Insured?	Policyholder	Group members and their family members
Eligibility Criteria	Must be 18 years and above (Children can be covered if the parent(s) is covered with the same insurer)	Must be a permanent employee of the company or permanent member of the group
Pre-policy Medical Check-up	May be required (especially in the case of senior citizens)	Not required
Sum Insured	High sum insured options available	Low sum insured options available
Pre-existing Diseases	Covered after a waiting period of 2 to 4 years	Covered from day 1
Maternity Benefit	May or may not be available	Available
Critical Illness Cover	Available if opted by the policyholder	Not available
No Claim Bonus	Available	Not available
Tax Benefit	Available	Not available
Extent of control	Full control by the policyholder to increase/decrease coverage	Limited control is available with the insured as the coverage is decided by the employer
Customizations	Can be customized to suit the policyholder’s medical needs	Not possible
Flexibility to Compare	Full flexibility to compare different insurers and choose a plan of choice	No freedom to choose the insurer as it is chosen by the employer
Premium Payment	Paid by the policyholder	Paid by the employer
Claims	Claims can be raised directly with the insurer	Claims may have to be raised with a TPA
Exit Criteria	Most plans come with lifetime renewability	Policy ceases to exist when the employee leaves the company

In a Nutshell

Individual health insurance and group health insurance have more differences than similarities. While one is designed to cater to the individual health needs of a person, the other one is designed to meet the medical needs of an entire group. Now that you clearly know the differences between these two types of health plans, you can sensibly decide if you need to buy an individual health plan in spite of being covered under a group health policy.