What Is The Difference Between Group Health Insurance And Individual Coverage?

Example: Mahesh buys a health insurance policy with a sum insured of Rs 15 lakhs. After a few months, he gets diagnosed with acute appendicitis and requires surgery for which he will be hospitalised. The surgery costs around Rs 3 lakhs. The insurer will pay for his hospitalisation expenses in accordance with the policy terms and conditions. In this case, they will cover the hospital bill of Rs 3 lakhs and the sum insured will be reduced to Rs 12 lakhs for the remaining period of the policy.

Aspects

Individual Health Insurance

Group Health Insurance

Premiums

The premiums may vary, depending on underwriting, The cost of these plans is generally higher than that of group plans.

You pay the premiums under an individual health insurance policy.

Compared to individual policies, group plans have lower premiums.

Generally, the group administrator pays the premiums. However, you may have to pay full or partial premiums in some cases.

Proposal Forms & Declarations

A detailed proposal form must be filled out for individual health insurance policies.

Group plans involve less documentation. Basically, proper consent and a good health declaration are required for the policy to be approved.

Coverage

You are covered as long as you keep renewing the plan and make timely premium payments.

The insurance is tied to the group membership. You will no longer receive benefits once you leave the group.

Control Over policy

This policy is completely under your control. Features and benefits can be chosen according to your preferences.

Policy features will be determined by the owner of the group. Therefore, you will have little or no control over the policy.

Medical Tests

In individual health insurance plans, medical checks are often required if -

1. you are older than 45
2. the sum insured is more than INR 25 lakhs
3. you declare a medical condition in your proposal.

Some insurers demand telemedical tests regardless of declarations.

Group policies do not necessitate any medical tests. The certificate is issued based on a good health declaration.

Pre-Existing Diseases

You will have to serve a waiting period for pre-existing diseases.

Most of the policies cover pre-existing conditions from day 1.

Policy Issuance

Policy issuance is subject to the completion of a detailed proposal form and any physical or telemedical tests. Soft copies of the policy are available immediately, but hard copies may take up to 7 days to arrive.

Members receive their policy within 24-48 hours of opting for it and it takes effect right away.

Policy Cancellation/ Discontinuation

Cancelling or discontinuing the policy is your decision.

Group owners can withdraw or cancel the insurance scheme at any time.

Tax Benefits

You can receive tax benefits on the premiums you pay every year under Section 80D of the Insurance Act.

If the group policyholder pays the premium, you do not get any tax benefits.
If you pay full or even partial premiums for a group policy out of your own pocket, you can claim tax benefits under section 80D.