Group Health Insurance Vs Individual Health Insurance

Group health insurance meaning

Group health insurance is an insurance plan that is bought for a group of people. This group can either be an association, group of friends or corporation. However, group health insurance is more common with employers (organizations) like you; and is often known as corporate insurance which is bought by the employer for the staff of an organization and their dependents.

The group health insurance premium is comparatively less and is primarily calculated based on the number of people insured under the plan, and the group cumulative risk. This insurance is often selected by you (the employer) and the premium cost is either completely paid by you or can be divided between you and your employees, where you (the employer) often bear the bigger chunk. Group medical insurance like most health insurance is valid for one year. The group health insurance coverage ceases to exist the day your employee leaves the organization.

Read: Difference between GMC insurance and GPA insurance.

Individual health insurance meaning

Individual health insurance is an insurance plan that any individual buy for themselves and their families. Under individual insurance, the family includes parents, spouses, and children. The premium is calculated based on multiple factors like age, gender, medical history, lifestyle habits, etc. The policy is often purchased after an insurance agent's recommendation.

The policy coverage might seem more comprehensive. Especially because the policyholder has the freedom to choose individual insurance and can be customized as well by paying a little extra for added benefits (riders). However, the premium for individual insurance is on the higher side. The policy is not affected by the employment status and remains valid until the policyholder wants.

Difference between group health insurance and individual health insurance coverage

Here is a comparison table between a group health insurance policy and an individual health insurance policy based on certain key factors.

Factor	Group Insurance	Individual Insurance
Policy buyer	Employer	Policyholder
Waiting period	Covered from Day 1	15 days to 4 years (for specific medical conditions)
Premium deduction	Employers pay or deduct a portion from their salary	Policyholder makes payment on a monthly or annual basis as per policy terms and conditions
Cost	Comparatively cheaper as the risk is spread among the employees	Higher premium
Coverage	Customizable and decided by the employer	Customizable and decided by the policyholder
Duration	Lasts one year but gets canceled if an employee leaves the company	The policyholder can decide the duration of the policy.
Bonus Claims	No bonus claims	If you don’t make claims in a year, you are eligible for no claim bonus. Can get discounted price during renewal.
Medical checkups	No need for a medical check-up before buying	A medical checkup is mandatory before buying.
Tax deductions	Available under 80D	Available under 80D
Covid cover	Covered from Day 1.	15 days waiting period

Frequently asked questions

Is group insurance better than individual insurance?

Both has its own benefits. Group insurance is generally paid by the employer and indiviadual insurance is paid by you. Hence, being in a company that offers group insurance is better. However, you individual insurance is in your control and group is not. With individual insurance, you can choose what you want.

What are the disadvantages of group health insurance?

Is not valid when you leave the organization
It is what the company chooses to offer you. You don’t really have a say.
Not reliable completely as the employer can choose to not offer employee benefit insurance in the next renewal.