Although the difference between a group and an individual insurance policy is not drastic in terms of the coverage it offers, the main distinction lies in its other aspects such as customization and cost. If you are new to health insurance or even if you aren’t and are simply in two minds when it comes to choosing between a group health insurance policy and an individual health insurance policy, here is how you can decide.

1) The Specifics of Group and Individual Insurance

 While individual insurance caters to one particular person or that person’s family, it is usually a small group of people. Group insurance is more like a package that is selected by organization for its employees. The organization can choose to select an already available policy or can come up with a self-insured plan.

2) Convenience and Command

While in an individual policy, the candidate can be rejected for the insurance policy owing to financial or health related issues, in case of group insurance policy for employees, each and every employee in a company is applicable for the plan and is granted approval for the same without any hassles. This is why; it is easier to obtain a group insurance plan when compared to an individual one.

3) Cost of the Policy

An individual health insurance is comparatively more expensive than a group insurance plan. This is because, with group insurance you buy in bulk so you get discounts while the cost to the employee is minimal. Only if an employee chooses to add extra benefits, s/he has to pay additional fees. When it comes to individual plans, premium is deducted separately while for group policies the premium is taken out from the salary.  

4) Coverage Offered

Individual plans stand valid under all circumstances whereas group Mediclaim policy for employees holds prominence only until the employee is working in the company and as long as they pay the required premium. You can ask to convert the group policy to an individual one when you resign or retire from the organization. As long as the premium is relatively lower than that of a new one, there is no problem in doing the same.

5) The Advantage of No Claim Bonus

When you have purchased an individual policy but haven’t made any claim for insurance all throughout the year, you are rewarded with the No Claims Bonus which offers you a discount on your premium upon renewal. When it comes to a group Mediclaim policy, however, you do not get the benefit of an NCB if you don’t make a claim during its term. On the contrary, if another employee has made a claim, the general cover offered to the other employees is reduced.

Additional Reading: How correct is your Analysis before Buying Insurance?

While in individual policies the individual has the complete authority to make changes and set the terms of the policy, in case of group policies, employees do not have such freedom. Each policy type comes with its share of pros and cons. You need to understand them well and decide whether the group cover is better or should you go ahead and purchase an individual policy nevertheless.