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What is the difference between a Group Health Insurance Policy and Individual Health Insurance policy?

Sep 26, 2023

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Group Health Insurance Policy

What is the difference between a Group Health Insurance Policy and Individual Health Insurance policy?
Contents

Introduction

With the pandemic, a lot of focus is on health insurance. Medical uncertainty and rising medical expenses are causing people to realize the importance of owning health insurance policies for themselves and their families. Employers have had insurance plans in place to increase employee productivity, such as the group mediclaim insurance policy for employees. Rather than an individual health insurance policy, a group health insurance plan covers a group of people, usually employees, under a single group health insurance policy. This article will talk about individual health insurance, group health insurance policy, and the difference between the two.

Individual Health Insurance: What is it?

As the name implies, an individual health insurance policy is a health insurance policy for an individual. An individual purchases an individual health insurance policy from one of the many plans offered by the various health insurance companies in India. Another variation of an individual health insurance policy is the family floater health insurance policy where the insurance is purchased for family members.

The terms and conditions of an individual health insurance plan are standard and cannot be customized in contrast to group mediclaim coverage for employees, where the employer will decide the group mediclaim insurance policy terms and conditions.

Individuals have complete control over the kind of plan they pick and can even add riders to increase their coverage.

Group Health Insurance: What is it?

Like individual health insurance policies, group health insurance policies are designed to benefit a group of people belonging to similar classes or groups. An excellent example of this is a group mediclaim insurance policy for employees. In this policy, an employer obtains and customizes health insurance policies for their employees.

An organization’s main aim in providing group mediclaim coverage benefits is to create a positive working environment and increase employee loyalty and assist their employees with ever-rising medical expenses. One can also buy a Group Health Insurance Policy for people belonging to the same group such as a bank can buy a Corporate Health Insurance Policy for its customers or a club can buy it for its members.

A Group Mediclaim Insurance Policy is also commonly known as GMC Policy or Corporate Health Insurance Policy. Here, the person in charge of such a group takes the insurance plan.

What is the difference between an Individual Health Insurance Policy and Group Health Insurance Policy?

There are both pros and cons to individual and group health insurance policies. One needs to analyze carefully before choosing one. Below are the points of difference between the two:

1. Group Health Insurance Policy is cheaper than an Individual Health Insurance Policy:

One of the biggest advantages of a Group Health Insurance Policy for employees is that the premium per person for the same sum insured is generally lower than the premium for an individual health insurance policy. As a result, employees can avail a comprehensive group health insurance policy at much lower premiums. Additionally, the premiums for a Group Mediclaim Policy are paid by the employer on behalf of the employees while the individual has to pay the premium himself for an individual health insurance policy.

The cost of a Group Health Insurance Policy for employees is lower than an individual health insurance policy because the organisation purchases a Group Mediclaim Policy for employees together and hence they get a higher discount and a lower rate.

2. Pre-medical checkups:

When taking an individual health insurance policy, the insured must disclose all prior medical issues. The Insurance Company might ask the individual to undergo some pre-medical checkups as well before accepting his health insurance policy. Pre-Medical Checkups in health insurance are very common for individuals over 50 years of age or if the person wishing to avail the health insurance policy has some pre-existing diseases. In contrast, Pre-Medical Checkups are not required for a group health insurance policy. A group health insurance policy is purchased for a group of employees together and not for an individual.

Employees do not have to undergo stringent medical exams or comply with other health conditions which is another big advantage of a GMC Policy vis-à-vis an Individual Health Insurance Policy as Individual Health Insurance Policy applications gets rejected a lot of times due to underlying health issues of the individual while Group Health Policies cover all employees without exceptions and even those with any pre-existing medical conditions and without any medical checkups.

3. Waiting Period for Pre-Existing Diseases:

A big advantage of a Group Mediclaim Insurance Policy for Employees is that it offers cover for pre-existing diseases from Day 1 without any waiting periods. All Individual Health Insurance Policies, on the other hand, have a waiting period of 2 years – 3 years for Pre-Existing Diseases. This feature of a Group Health Insurance Policy is really useful as lots of people with pre-existing diseases are unable to avail coverage under an individual health insurance policy while they can avail a Group Mediclaim Coverage even with Pre-Existing Diseases.

** 4. **Maternity Cover without any Waiting Period:

Most Individual or Family Floater Health Insurance Policies have a waiting period of 3 years to 4 years for Maternity Coverage while a Corporate Health Insurance Policy offers Maternity Coverage without any waiting periods. This feature of Group Health Insurance Policy is very beneficial for female employees.

5. Policy Cancellation:

Individual Health Insurance Policies offer lifetime renewal benefit to the insured person. This means that as long as the Insured pays the due premium on time, he can renew and avail the benefits of his health insurance policy. The Insured also has a right to cancel the individual health insurance policy by giving notice to the insurance company. So, only the insured has the right to cancel the individual health insurance policy.

On the other hand, the insured employee is covered under a group health insurance plan only as long as they remain an employee of the company which purchased the Group Health Insurance Policy. Once the employee retires or leaves the company, they are generally not covered under a group health insurance policy, and the policy benefits cease. Unlike an individual or a family floater health insurance policy, only the employer has the right to cancel the group health insurance policy.

6. Customised coverages

Individual Health Insurance Policies have standard coverages based on the insurance companies offering the plan. The coverages or the clauses cannot be modified or customised.

In the case of group mediclaim coverage, the organization purchases the insurance policy for its employees and dependents. The employer is free to customise and decide the coverages and terms and conditions of the GMC Policy. Employers can customise practically all clauses from Room Rent restrictions, Co-Payment and Sublimit Clauses to Waiting periods in a Corporate Health Insurance Policy.

The table below summarises the differences between a GMC Policy and Individual Health Insurance Policy.

Difference between Group Health Insurance Policy and Individual Health Insurance Policy

Group Health Insurance Policy Individual Health Insurance Policy
Cost The Cost of a Group Mediclaim Policy is lower than an Individual Health Insurance Policy The premiums for an Individual Health Insurance Policy are higher than Group Health Insurance Premiums
Premium Payment An employer pays the premium for Group Health Insurance Policy The Individual pays the premium for Individual Health Insurance Policy
Pre-Medical Checkups No Pre-Medical Checkups are required for Group Mediclaim Insurance Policy Individual Health Insurance Policies may require Pre-Medical Checkups depending on the age of the person and pre-existing diseases declared
Waiting Period for Pre-Existing Diseases A GMC Policy can cover pre-existing diseases from Day 1 without any waiting period Individual Health Insurance Policies have waiting periods of 2 yrs-3 yrs for pre-existing diseases
Waiting Period for Maternity Cover A GMC Policy provides Maternity Cover without any waiting period An Individual Health Insurance Policy has a waiting period of 2-3 years before the insured can avail maternity coverage
Policy Duration The group mediclaim policy coverage ends as soon as the employee leaves the job An individual health insurance policy has lifetime renewal as long as the Insured person pays the premium
Policy Cancellation Only the Employer can cancel a Group Health Insurance Policy Only the Insured Individual can cancel an Individual Health Insurance Policy

What is better – Group Health Insurance Policy or an Individual Health Insurance Policy?

The article above illustrated the difference between an individual and group health insurance policy. A person who suffers from high medical risks should always purchase an individual policy, even if they are covered by a corporate health insurance plan because the group mediclaim coverage will continue only as long as they remain employed with the company.

On the other hand, companies should always provide the benefit of group health insurance plan to their employees and dependents because it will lower the financial burden on the employees by providing insurance coverage and boosting employee morale.

Companies can seek the assistance of an insurance broker like Qian Insurance Broking LLP to provide comprehensive employee benefits. Along with their tie-ups with major insurance companies, the insurance broking firm seeks to provide their customers with expert and tailored insurance solutions along with 24*7 claim assistance. If you wish to purchase a Corporate Health Insurance Policy for your employees or want to know more about group mediclaim insurance policy, you can fill this contact form. We shall get in touch with you within 24 hours.

  1. Group Health Insurance Policy for Employees
  2. What is Group Health insurance?
  3. What is an Employee Group Health Insurance Policy?
  4. What does a Group Health Insurance Policy cover?
  5. What is not covered under a Group Health Insurance Policy?
  6. How is a Group Health Insurance Policy different than an Individual Health Insurance Plan?
  7. What are the Key Features of a Group Health Insurance Policy?
  8. What are the add-on covers available under a Group Health Insurance Policy?
  9. What is the impact of Room Rent Limit on the claim amount payable under the Group Health Insurance Policy?
  10. Should employers opt for a Pre-Existing Disease Coverage from Day 1 in Group Medical Insurance Policy for employees?
  11. Does a Group Medical Insurance Policy provide Maternity Benefits?
  12. What are Waiting Periods under a Group Health Insurance Policy?
  13. What are the benefits of Group Health Insurance Policy for Employers?
  14. What are the benefits of Group Health Insurance Policy for Employees?
  15. Why should you purchase an Employee Group Health Insurance Policy for your organisation?
  16. How many employees do you need to purchase a Group Health Insurance Policy?
  17. Who is eligible for Group Health Insurance for Employees?
  18. Are Employer Group Health Insurance premiums Tax-Deductible?
  19. How much does a Group Health Insurance Policy Cost?
  20. Which are the leading Group Health Insurance Companies in India?
  21. How to purchase a Group Health Insurance Policy?
  22. What are the Documents required to make a claim under a Corporate Health Insurance Policy?
  23. Why should I Purchase a Group Health Insurance Policy through an Insurance Broker?
  24. Compare Plans from 20+ Group Health Insurance Companies and choose the Best Group Health Insurance Policy in India with Qian!
  25. FAQS
  26. Testimonials

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