Simplifying Group Health Insurance And Individual Health Insurance

The general idea that we have around Health Insurance is a service that allows us protection against medical bills for our health concerns.  The task of deciding the perfect health insurance plan, that suits our requirements might be confusing, especially if we don’t know all the details like coverage details, waiting periods, exclusion etc. A few factors need to be taken into consideration when deciding on a health insurance plan: 

·       For whom to purchase? – Self / Family / Employees / Members of your association 

·       Which plan to purchase? – Individual Retail Health Plan or a Group Insurance Plan 

·       What coverages should be there in the plan? 

·       What are the terms and conditions under the policy? 

·       From where to purchase? – Online / Agent / Broker 

·       Is there any other benefit with the Insurance Purchase?  

In this article we will help you with an overall understanding of an Individual Health Insurance and a Group Health Insurance, which will help you decide “which plan to purchase”. 

Individual Health Insurance

When an individual purchases health insurance on their own or through an agent/broker for themselves or for their family, it is referred to as Individual Health Insurance. This is not provided by an association or through the individual’s employer. 

Group Health Insurance

When a health insurance plan is provided to employees by an employer or by an association to its members. There are regulatory policies that restrict group health insurance from being provided to anyone, such as: The policy is only provided if the number of employees or members in an association are more than the minimum number (currently 20) as specified by IRDAI from time to time. Hence, Individual Health Insurance is the best option for employers who have less than 20 employees in their organization. Apart from this, there are other indicators to consider in each type of policy: 

· Cost Consideration: If everything else is the same, group health policy generally costs less for an individual, when a group has been successfully formed. However, if the group size is below 100, then there could be huge operational costs leading to little or no cost-benefits at all. Hence, individual policies can be cost-effective in such cases as they reduce operational work.  

· Reward as “No Claim Bonus”: Under a group health insurance policy, as an individual, you won’t be able to avail rewards like “No Claims Bonus” for staying healthy during the insurance period. However, in an Individual Health Insurance policy, you reap the benefits of staying healthy in the form of enhanced cover, renewal premium discounts, etc. for not claiming under the insurance policy.  

· Enhanced Features: A group health insurance product may provide you with enhanced features such as relaxation on the waiting period for pre-existing diseases or maternity benefits which might not be there for new individual health policy.  

· Customization of a plan: A group health insurance policy can only be customized by an employer/association who is purchasing a plan for their employees/members, with no customization allowed for an individual. For specific, individual needs like coverage for additional family members, enhancement of Sum Insured, add-ons, etc., an individual policy is more appropriate.  

· Insurance Period: Under a group health insurance policy, you are only covered until you are an employee of the organization or a member of the association. Once you leave the organization or association, your coverage gets over. In an individual health insurance policy, you can get yourself covered for an entire lifetime as long as you pay your premium on time.  

In a nutshell, we recommend the following points before deciding on the insurance plan :  

· An organization having more than 20 employees can opt for a group health insurance plan subject to availability and should consider the operational costs and efficiency with the insurer.  

· An individual who wants to have sufficient coverage for their family members can opt for an individual health insurance policy.  

· An individual who already has a group health insurance policy can also upgrade their coverage by purchasing an individual health insurance policy. For example, if you have an insured sum of INR 5 Lakhs under a group policy, then you can buy an individual health insurance policy that doesn’t pay you up to 5 lakhs but provides you for a higher sum insured.  

· Group plans are only valid till the individual is employed with the organization, as such getting a health insurance cover at later stages in life will be difficult.   

· For individual health policy, do thorough research, compare and evaluate the plans available.  

With IRDAI announcing Standardization of Health Insurance through Arogya Sanjeevni Policy, complexities of Individual Health with different insurance companies are now lesser. However, for enhanced coverages and features, a customer still needs to consider an insurance plan that meets all their requirements and gives them a sense of security.