Sunday, April 2, 2023
   /   /  Post Comments

Difference between Individual Health Plan & Group Health Insurance Plan

  By : , Delhi, India       2.5.2016         Phone:-          Mail Now

Insurance being very essential today; we need to be absolutely sure that we have got ourselves the right type of insurance plan. While opting for an Insurance cover an individual can get one of the various individual health plans available in the market or ascertain if the group plan associated with their company is sufficient.

Several people solely rely on their group insurance plan while some prefer taking an individual cover along with this plan, as that would offer a greater and more comprehensive cover. Even though both the plans provide a basic type of coverage; there are some very notable difference between the two plans and to arrive at the right decision it is imperative to understand what both offer, along with the differences and the benefits.

Understanding both

Group Coverage- Health insurance provided to employees by an employer or by an association to its members would come under this category. Group health Insurance is designed specifically for associations or companies; and can be purchased either from the market directly or can be self insured plan set up usually by larger companies

Individual Cover- Health insurance which has not been bought through an employer or association and bought by the individual themselves is called individual coverage. Though the name suggests as something for only one individual; this plan can cover not only one person but the entire immediate family. It is purchased on the private market by a single person either only for themselves or for themselves and their entire family.

How does it work?

Group insurance plan- it is either offered as an employee benefit by a company to its employees or to members of a particular association by an alumni group and so on. While considering the premium amount the cumulative risk of all the members is considered and the individuals covered are given a certain fixed and uniform cover. Normally in a group only few members would be likely to make a claim; which is great balancing point in terms of the risk factor in a group plan. Generally the coverage is provided only till the individual is associated with the group and becomes void once the person leaves that group.

Individual insurance plan- it caters to an individual’s requirements and is customized according to individual specifications such as age, health, past medical history, etc. Various details related to the individual are kept in mind while ascertaining the premium amount. The plan provides flexibility to the buyer to add on features as per their requirements later on. The time frame of the policy too is decided by the individual, and is independent of factors like association with any groups or company.

Looking at the differences

Price – As compared to individual plans; group plans similar to the bulk discounts; cost much lesser. Due to the large number of individuals involved the cost of the plan is reduced, and at times is even availed at no extra cost by the employee. Premium for groups plans are deducted from the salary, unlike individual plans where the premium needs to be paid separately. In case of group plans as the benefits are the primary ones, if an employee wants to opt for added benefits he may need to pay an additional fee.

Easy approval - Group Insurance can be easily availed by member of a group or employees; as every individual who is an employee of the company becomes eligible and is automatically granted approval for the insurance package. However with individual plans the individual needs to follow a particular procedure to get approved and though this may be uncommon; but in certain rare cases an individual may even be denied the insurance package, for varied reasons like past medical and financial history. On the other hand while availing group insurance plans, the process of underwriting, where the to-be insured's medical history is closely examined, is sometimes waived off.

Flexibility – Unlike group plans; individual plans offer much more flexibility to the individual to decide the terms of the policy. Also the individual has full control in deciding if they want to discontinue the policy as and when they feel it is right. Also in the case of individual plans one does not have to keep working with the same company to avail the benefits of the cover. Moreover unlike a group one which is uniformly spread over all the individuals in the group, in an individual cover the person has flexibility to decide the coverage as per their needs, and the policy is decided on the basis of personal factors like- medical financial and social situations of the person taking the cover.

Claim Bonus – In a group policy when an individual does not make any claim throughout the tenure of the policy; they are not eligible for any added benefit. But in the case of an individual policy; if no claim is availed of during the tenure the person becomes eligible for a No Claim Bonus. This can be discounted renewal premiums or even higher cover and no extra cost.

Which one to pick?

After ascertaining all these factors amongst others; eventually one needs to determine which plan is the best for them. SecureNow offers accurate analysis and advice on whether the individual needs to pick individual or group health insurance plan. Also besides understanding the concept and differences; knowing the main advantages of both the plans can greatly help in picking the right type of insurance cover.

Group Health Insurance - More members’ means higher discounts in a group plan, generally employers cover nearly all areas of the premium and individual generally doesn’t need to pay extra, it insures anybody who is employed regardless of their health conditions and age.

Individual Health Insurance – Provides flexibility to choose a specific type of coverage that suits the needs of the individual and their family. Though it may cost more than group cover, if the package is right for the individual they will end up saving on prescriptions and medical care on the whole. Changing the job doesn’t mean going through the tedious task of changing your insurance cover and eventually a healthy individual may end up paying lesser premium as compared even to a group cover that needs to consider both high and low risk individuals in the group.

Every plan has its own pros and cons and eventually the task of choosing the right plan depends on the individual’s outlook, knowledge about each plan, medical history and financial capability.

TAGS: Health insurance,   group insurance,   group coverage,  

DISCLAIMER: The views and opinions expressed in this article are those of the authors /contributors and do not necessarily reflect the official policy/opinion of / Suni systems Pvt. Ltd. / Suni systems Pvt. Ltd and its staff, affiliates accept no liability whatsoever for any loss or damage of any kind arising out of the use of all or any part of the material published in the site. In case of any queries,or complaints about the authenticity of the articles posted by contributors, please contact us via email.