How are Group and Personal Health Insurance Different? Pros and Cons

HEALTH INSURANCE



Individual vs Group Health Insurance

With a wide range of customized health insurance plans available these days, choosing the best cover for medical exigencies has become highly convenient. Broadly speaking, health plans fall under two categories - Group health policies and Personal or Individual health policies.

Family health insurance plans and health coverage sponsored by the employer are mostly group coverage that is much affordable than individual health policies. However, what is common between them is they both provide cover for emergency hospitalization expenses.

As far as the differences are concerned, there are a few of them which must be clearly understood. This is necessary in order to make the right decision for ensuring a financially secure future for your family.

What is a Group Health Insurance Policy?

Group health policy is the one provided as part of the employee benefits by an organization or an association. The coverage and premium is decided on the basis of the cumulative risks of all the individuals of the group. The coverage is uniform and will be available to the members so long as they are a part of the group.

What is Personal Health Policy?

It is a kind of health insurance policy that an individual buys for himself/herself and his/her family. The policy coverage is usually customized to suit the specific requirements of the individual while the premium is decided on the basis of factors such as individual’s age, family medical history, lifestyle and type of coverage selected. The policy remains valid until the time the insured person wants.

We discuss the basic differences between group and personal health insurance, below.

Differences Between Group and Personal Health Plans

Factors to Consider

Group Health Plans

Personal Health Plans

Policy Duration

The coverage is controlled by the provider and can be canceled if the member is no longer a part of the group.

It is up to the policyholder to continue the plan or not.

Coverage

Uniform coverage is offered to all the individuals of the group.

The policy coverage can be customized by the policyholder.

Premium

The amount is deducted from the employee salary directly.

The premium amount is paid by the individual on a regular basis.

Medical Check-ups

For a specified coverage, there is no need for prior medical check-ups.

Medical check-ups are mandatory requirements for buying personal health plans.

Pros and Cons of Group and Personal Health Plans

As mentioned earlier, group health plans are much more affordable than individual health plans as the cost is paid by the employer. This plan is highly preferred by employers as there are tax advantages for them as well as the employees. Yet, additional benefits are limited and usually decided by the employer. Thus, if you do not have any specific requirements for health covers, this plan is the best as it offers coverage for emergency medical or hospitalization expenses. However, even if you have a medical history of a specific illness, you would still be considered for coverage under this plan whereas your request could get rejected if you opt for an individual health plan. As far as the advantages of such plans are concerned, health cover for pre-existing conditions is the biggest plus point of group health plans.

Individual or personal health plans are little expensive than group plans as the premium costs are entirely borne by the policyholder. Moreover, due to some permanent exclusions or a medical history of specific illness, you may find it difficult to get individual health coverage. If you have dependents to look after, this plan is highly recommended. Unlike group plans, personal health plans offer additional benefits such as no claim bonus. That is, policyholders become eligible for discounts or increased sum insured upon policy renewal. When compared to group plans that are applicable only as long as you are with the employer, individual health plans are valid until the policy is terminated by the policyholder.

Make the right choice between group and personal health insurance plans. Choose Care Health Insurance (Formerly Religare Health Insurance) for the well-being of you and your family.