Group and Individual Health Insurance — Chief Differences
With the increase in the occurrence of critical illnesses all around us, you need a shield in the form of health insurance for medical emergencies. However, insurance companies in India offer several products and it can be confusing to choose the best one for you.
Of the many choices in health insurance, two are individual and group. Today, we are looking at the chief ways in which these two types of insurance plans differ.
Points of difference – Group and Individual Health Insurance
People usually buy individual health policies themselves. Group health policies are usually bought by the head of the group or company on behalf of the entire group. Individual and group health insurance plans are different in several key ways but both have distinct benefits. So, ideally, you must have your own individual insurance but also encourage your company to offer group insurance to employees.
Group health insurance offers healthcare coverage to a group of people. Groups, according to the Insurance Regulatory and Development Authority of India (IRDAI), can include employers and employees, banks and account holders, cultural associations and their members, or residential societies and their members. Some of the best group health insurance policies in India provide coverage to members, their spouses, dependent parents, and children. However, coverage benefits may vary from one insurer to another. Additionally, it would depend on the choices that the insured make. The extent of insurance can vary by member. On the other hand, individual health insurance usually covers only one individual, or at best the individual’s family. All have similar cover. And, these would be based on choices made when buying the policy.
Usually, group health insurance plans are cheaper than individual health insurance policies. This is what makes group plans advantageous for employers. They can spend less and offer the incentive of medical insurance for employees and their families. However, group health premiums can vary year on year based on claims. In individual insurance, the rates vary only with age and not with previous claims.
Coverage for pre-existing conditions – Group and Individual Health Insurance
Before you buy an individual health insurance plan, your insurer may ask you to undergo some medical tests and to declare any pre-existing diseases. Your application for insurance may be rejected if you are diagnosed with a critical illness. In other cases, certain pre-existing diseases may not be covered for the initial two to four years of an individual policy. However, group health insurance generally provides medical coverage to every group member included in the policy, immediately, regardless of pre-existing conditions.
If you’ve opted for different individual health insurance policies that cover several people in your family, then you have to renew each policy on or before its expiry date. This can mean remembering several different dates for different policies. However, a group plan can include multiple individuals, all specified in the master policy, which would have a single renewal date.
Group health insurances must be renewed each year and the insurer can decide not to renew as well. Also, in certain adverse claims situations, the health insurer may cancel the group insurance before renewal. However, in individual insurances, insurers have to renew the insurance life-long and cannot unilaterally cancel the insurance.
These are some of the chief differences between individual and group health insurance plans. Both have a meaningful role in your health planning. As an employer, if you are considering purchasing group health insurance for your employees, we can help you. At SecureNow, we offer group health insurance from all the good insurance companies in India. You can explore these plans here. And we can help you make the best choice based on your needs.