Companies buy group insurance plans and provide health cover to employees as part of the compensation package. Meanwhile, a person buys individual health insurance for himself and/or his family.
The basic purpose of health insurance (whether group or individual) is to cover your medical expenses. But there are noticeable differences between the two. Some of these differences are listed below:
|Individual Health Insurance||Group Health Insurance|
|The contract is between the insurance provider and an individual.||The contract is between the insurance provider and the company/employer.|
|You have the control over the policy.||The company controls the policy.|
|Medical tests are may be required before you buy an individual policy.||Medical tests are not required for a certain extent of cover. Beyond that, certain tests may be needed.|
|You pay more for an individual policy as it gives you flexibility.||A group policy costs less when calculated on a per-person basis because of the benefits of bulk buying.|
|You pay the premium individually on a yearly basis or as informed by the insurance provider.||Either the employer pays the full premium or the employer and the employee share the amount.|
|You can use the policy as an asset while taking a loan. The loan provider is confident that loan repayment will continue even if medical issues arise.||You cannot use the policy as an asset while taking a loan.|
|You can choose the insurance plan best suited for your personal, medical, financial, and social circumstances.||The chosen plan is generic for employees and cannot be customized. At the most, employers may allow the employee to increase the policy cover, provided he/she bears the additional premium cost.|
|Your insurance is valid irrespective of your employment and until you choose to discontinue it.||Your insurance is valid only as long as you remain employed by the company.|
|You can be denied an insurance package depending on your age, health history, and/or financial history.||If you are an employee of the company, you are automatically eligible for the insurance package. Thus, it is easier to get insurance under group plans.|
|The risk factor depends on your medical/financial history.||The risk factor includes all employees in the group. So, the renewal premium increases.|
|You are eligible for a No-Claim Bonus if you do not make any claim during the policy term.||If you make no claim during the policy term, you do not get any benefit.|
Thus, group and individual health insurance have their own benefits. Group insurance can help you save on costs but individual health insurance is beneficial for the long term. So, it makes sense to buy an individual policy that matches your needs, even if you have group insurance provided by your employer. Make the extra effort to find out about the individual insurance plans suitable for you. Compare policies and quotes from various providers, and select the best.