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.
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.
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.
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.
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.
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.