FINANCIAL EDUCATION

Everything about Group Health Insurance & Individual Health Insurance

Do you want to buy health insurance and are confused between group health insurance and individual health insurance? Then, this article is for you. In this article, we are going to cover each of them individually. This can help you while choosing suitable health insurance for you or your family.

What Is a Group Health Insurance Policy?

A group health insurance policy covers a group of people, typically a group of employees or members of a company. If an organisation offers this plan, the premium is paid by the organisation itself. Group health insurance policies are also available from banks, housing societies, and other financial institutions.

 What Is an Individual Health Insurance Policy?

Individual health insurance policy is bought by the individuals who want to get insured. It is opposite to group health insurance policy where the insurance is bought by the employer to its employees. Here individuals buy it on their own to preserve their health and pay medical expenses when they arise.

How Does Group Health Insurance Work?

  • A group health insurance plan typically provides a predetermined amount of guaranteed sum that covers the costs of an unexpected hospitalisation, medical treatment for specific conditions, and similar expenses.
  • Depending on the policy and the employer, family members may be covered under the same plan.
  • The sum promised is determined by the compensation package, which differs from  one firm to other. An additional premium must be paid to raise the sum insured amount.

How Does Individual Health Insurance Work?

  • When you buy an individual health insurance, you will get into a contract with the insurer.
  • The agreement says that the insurer would reimburse your medical expenses up to the sum covered and in accordance with the policy terms. In exchange, you must pay premiums on a regular basis.
  • Assume you’ve got the best health insurance policy available, with an amount covered of Rs. 5 lakhs. If you are hospitalised after acquiring the insurance, the insurer is responsible for paying your hospital fees according to the policy’s terms and conditions.

Pros and Cons of Group Health Insurance

ProsCons
1. Since employers pay for insurance on the behalf of the employees, It comes free for the employees.1. You will no longer be protected by the Group Health Policy if you are laid off by your employer or voluntarily quit the organisation.
2. Pre-existing illnesses are covered from the first day of a Group Health Insurance Plan for Employees, therefore there will be no waiting time.2. Your employer has the authority to pick the health insurance carrier, establish coverage, and other health plan features and benefits. Individualized needs are less likely to be met in such a circumstance. As a result, you’re covered by a general policy that applies to all employees at the organisation.
3. Family members might be covered under the Group Insurance Policy for Employees. For example, you can have the option to choose your spouse and parents covered by the insurance in the event of a medical emergency.3. The coverage provided by Corporate Health Plans may not be sufficient in metro regions where hospitalisation costs are greater than in other places.
4. The best part of a group of insurance plans is it cover maternity-related expenditures. In the same way, the newborn baby is protected for up to 90 days.4. Because the employer controls the coverage, you, as a policyholder, do not have much flexibility in customising the plan to your preferences. If you want to exercise a particular level of independence, you may have to pay a fee.
5. Top insurance firms that provide such coverage have partnered with hospitals to ensure a smooth claim settlement procedure.5. You are not eligible for tax advantages under section 80D of the Income Tax Act since you are not paying the premium for health insurance. You can get them, though, if you upgrade your plan and pay for the extra coverage.
6. This type of coverage also covers outpatient therapy. As a result, treatment as an out-patient (without being admitted to the hospital) at a hospital or a day-care facility is covered by the insurance, according to the terms and restrictions.6. Unless you’re protected by insurance that provides a simple way to file a claim, the claim settlement procedure might be a pain.
7. Preventive healthcare methods help to avoid or lessen the severity of diseases. Insurers reward preventative healthcare measures in order to encourage you to live a healthy lifestyle.7. Because of the above disadvantages, a group insurance plan is not suitable for personal financial planning.

Pros and Cons Of Individual Health Insurance

ProsCons
1. When you look at the cost of group health insurance over time, you’ll notice that it’s been constantly increasing. Small and medium-sized firms are finding it increasingly difficult to afford health benefits for their employees as group health insurance costs rise.Insurance premiums increase with the age. The relationship between health insurance rates and age is one of the most crucial. Your age has a significant impact on the premium you pay for your insurance.
2. Individual health insurance rates are not only cheaper, to begin with, but also employees may also be eligible for further savings.2. If you have a health condition at the time of purchase, such as high blood pressure, diabetes, or thyroid disease, any medical expenditures incurred as a result of these diseases will not be covered until the waiting period is ended. This is one of the major drawbacks.
3. With individual health insurance, policyholders can customize the plan according to their health issues.3. Many insurance contracts include a co-pay or deductible clause to deter fraudulent claim submission. You will be obliged to split your medical expenditures with your insurance provider if your coverage contains a co-pay provision.
4. Individual health insurance policies are fully transferable, which means your employees may keep their coverage even if they quit the company. 
5. Individual Insurance companies with tax benefits. Under Section 80D, policyholders can claim tax deductions up to a certain limit. 

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