The market of health insurance policies in India is quite a vast one. There are dozens of products available in this category of insurance policy. Plus, there are many insurance companies available as well. Hence, when it comes to purchasing a health insurance policy, a lot of people get confused with the options available. The biggest confusion they have is between these two options- individual health insurance policy and the group health insurance policy.
Most of the people think that the difference between an individual insurance policy and a group insurance policy is easy to understand. But, it is not that simple. There are various aspects related to these two types of insurance policies. If you are planning to buy a health insurance policy then this article will surely provide you a lot of useful information.
Understanding the definitions
First of all, let us understand the basic definition of an individual and a group health insurance policy.
- Individual health insurance policy- Like the term suggests, an individual health insurance policy is for the individual buyers. Only one person is covered under this kind of health insurance policy.
- Group health insurance policy- In this type of policy, more than one person is covered. So, this kind of health insurance policy can be purchased for covering all the members of a family; likewise, companies can also buy this kind of policy for their employees.
So, that was the basic definition of an individual health insurance and group health insurance policy. Now, let us understand the differences between them.
The cost factor
Without any doubt, the cost associated with group health insurance plans is low. This is the reason why a lot of organizations do not mind offering health insurance policies to their employee; free of cost. The premium associated with the group health insurance policies is quite lower in comparison to the individual policies. So, when the same premium is further divided among the family members or employees, the premium for each policy holder becomes even lower. This is the reason why purchasing a group health insurance policy is always cost-effective. If your family has many members then it is definitely better to opt for a group policy.
Convenience and control
Even though it happens very rarely, but it is possible that an individual health insurance policy holder may be denied the coverage. There could be a number of reasons behind it. On the other hand, each and every member under the group health insurance policy is eligible for the medical coverage and benefits. In the case of group insurance policies, the insurance companies closely examine the medical history of each and every member under the policy. For this reason, the convenience associated with the group health insurance policies is much better.
But, if we take into consideration the aspect of control then the individual health insurance policies will enjoy an upper hand here. When you buy an individual health policy, you get complete freedom to establish the terms of the health insurance policy. You can fine tune the various aspects of the policy by adding and discarding the elements as per your requirements. This is something one cannot do in the case of group policies.
No Claim Bonus
We all know about NCB or No Claim Bonus. In the case of group health insurance policy, the concept of no claim bonus does not apply. Even if you do not make a claim all through the policy tenure, you do not get any advantage. But, on the other hand, an individual health insurance plan does offer no claim bonus if no claim is made by you. So, when you renew your insurance policy tenure, you become eligible for a certain amount of discount.
So, how does it affect the coverage amount in the case of group policy? Well, if one of the members of the policy makes a medical claim, but refuses to pay a higher premium at the time of policy renewal, in that case, the overall coverage amount offered by the insurance policy may be brought down.
How to choose the right one?
No doubt, group health insurance policies can help you save a lot. If you have more than six or seven members in your family then it can be a good decision to go with a group policy. But, it is important to make sure that none of your family members is suffering from any major illness. Like it was mentioned above, it is not possible to customize a group health insurance policy. Hence, only the common types of health issues will be covered under such a policy. On the other hand, if you want to have better control over your health insurance policy, and want to include critical illnesses as well, in that case an individual health policy will be a better choice.
