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Individual Insurance or Group Insurance, What Should You Choose ?

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Most health insurance companies in the market today are offering two variants of health insurance – individual and group health insurance. It is also vital to understand the features and run a comparison of group insurance vs individual insurance before you purchase your policy.

Let us first understand what these policies are:

Individual Insurance Policy

As the name suggests, these policies are meant for individuals only. They  can buy a policy for themselves or an individual member of their family. While the name suggests that it is meant for one single person only, at times an individual policy can also cover a small group of people, like the immediate family members.

Group Insurance Policy

A group insurance policy is so designed that it covers a large group of people. These are generally meant for companies who want to purchase health insurance for their employees. These policies can be tailor made in order to suit the particular requirements of a company.

Here are some differences that set the two policies apart!

• Cost Factor
  The premium for an individual policy is higher as compared to the one of a group policy and is borne by the individual itself. Since group policies imply a bulk purchase, they tend to come out cheaper and bring along various discounts. The premium of a group insurance is borne by the company but is subtracted from the employee’s salary.

• Convenience of Purchase
  Individual needs to undergo medical tests and have to declare their medical history before they can buy an individual policy. The insurance company in such cases has a right to deny the policy if the person does not meet the desired eligibility criteria. On the other hand, it is much easier to obtain a group policy.

• No Claim Bonus
  If you do not make a claim on your individual policy, you are awarded with a no claim bonus. A group insurance does not have any such rewards for not making a claim.

• After Retirement 
  A group policy is only going to support you till the time you are associated with the company. Post retirement or termination of job, you do not get to enjoy any benefits or health coverage for yourself and your family members. An individual policy however covers you irrespective of your employment status. This is the reason why the premiums on an individual policy are higher as compared to the ones on group insurance.

While a group policy is an excellent benefit provided by companies, it is also important that individuals cover them and their families by purchasing an individual health insurance. Insurance providers like HDFC ERGO provide excellent plans and let you customise your own policy in terms of coverage, payment, critical illnesses and number of members covered.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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