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EMPLOYEES HEALTH

Group Health Insurance Vs Individual Health Insurance India

Advaitaa RaviAdvaitaa Ravi

Group Health Insurance vs Individual Health Insurance is a big decision that can affect your life, so it is crucial to know which is better. Read more here

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November 8, 2022
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Group Health Insurance Vs Individual Health Insurance India
EMPLOYEES HEALTH
Group Health Insurance Vs Individual Health Insurance India
EMPLOYEES HEALTH

Whether you’re an HR manager looking to attract the best talent from around the world or a rapidly growing small business, the real assets of your organization are your employees. It’s only when your employees are healthy, they can work productively and successfully contribute to business goals and objectives.

A solid employee benefits package can help attract and retain talent. Whatever your portfolio, your employees’ health will always remain the best investment.

So we need to know the difference between group health insurance vs individual health insurance and which is best.

Health insurance comes in varied sizes and shapes, but they share the same basic goal - provide financial coverage for medical costs.

With individual vs group health insurance, there are a few key differences, and knowing them can help you identify what type of insurance you need and how to get the most out of your coverage.     

What Is A Group Health Insurance Policy?

It’s one of the perks you enjoy as an employee of an organization. It works for a group of people.

  • It is a type of group health insurance the employer purchases for employees, where the employee pays little to no fee towards the premium. 
  • It covers you and sometimes your dependents.
  • The policy is pre-fixed and you can partially modify it.
  • Favorable option with an almost immediate claim bonus for pre-existing conditions too. 

What Is An Individual Health Insurance Policy?

An individual purchases individual health insurance.

  • You’re required to research individual health plans, compare them against each other, and make an informed choice.
  • You’re responsible for the entire payment of individual health policy. The costs depend on factors like age, health, medical check history, etc. 
  • Typically, policies come with long waiting periods and those with pre-existing conditions have to wait until the end of the waiting period for treatment. 
  • Individual policies need to go through a health checkup if you’re over a certain age and comply with an onerous KYC process that you can easily circumvent with group health insurance.

How Does Group Health Insurance Work?

Group health insurance for employees is like a master plan. The difference between group vs individual insurance is the former offers uniform coverage to individuals who are part of a group.

So, how does group health insurance work? When you work with Loop, you can pick and choose from different group health insurance plans by top insurers. One of Loop’s members will help you tailor-make a group insurance policy for employees best suited for your team. 

Most often, employers bear the cost of premiums and provide group coverage to their team as an additional benefit. Depending on the policy, the cover sometimes extends to family members too.

Once you select and finalize the group health insurance coverage and make the premium payment, the coverage kicks in from day 1, including pre-existing diseases.

At the time of a medical emergency, the insured individual can make use of the group health insurance policy at a network hospital to avail cashless services or at a hospital of their choice and opt for reimbursement.

How Does Individual Health Insurance Work?

Simply put, an individual health policy helps the insured during the time of medical emergencies. It protects you from bearing the full costs by covering medical expenses.

An Individual health insurance policy works like other types of insurance. You choose the insurer, the plan that suits your needs, and make the premium payment on a regular basis to keep your policy active.

In return, a portion of the medical costs is covered by your health insurer. At a time of need, you can pick between network cashless hospitals or a hospital of your choice and go in for reimbursements.

Pros And Cons Of Group Health Insurance:

Advantages of group health insurance:

1. Affordability -

The instant benefit of group health insurance is cost. The premiums are less expensive and it caters to employees of all ages without the stress of a hefty price tag.

Plus, the employer also contributes towards the premium, meaning lower financial costs, and deducts the premium from your pre-tax pay in smaller chunks.

You also have the option of free round-the-clock medical care with a bunch of specialists for even minor concerns. Therefore, for employees, group health insurance is a solicited choice. 

2. Added benefits and wellness perks -

Along with securing group health insurance from top insurers of your choice, you also get a host of benefits with Loop’s group health insurance plans offer at no hidden or added costs.

Some of them include free and unlimited primary care, wellness benefits like fitness classes, yoga sessions, mental health consults, dental and vision, coverage for pre-existing diseases from day 1, effortless claims management, coverage for pre and post-hospitalization charges, maternity cover, and more.

Click here to read more about Loop’s health insurance advantages.  

3. Health insurance coverage for families -

Along with securing yourself, group health insurance extends coverage to family members too. This way your family members are protected plus, you can easily manage health insurance policies.  

4. Preventive healthcare -

Loop focuses on preventive healthcare initiatives to help your employees maintain a healthy lifestyle. For instance, you can connect with specialized doctors anytime, anywhere on the Loop app and help prevent illnesses before they become worse. You can also join in on the number of wellness benefits that ensure you’re at the peak of your health.  

Disadvantages of group health insurance:

1. The cover is dependent on the employer -

With group health insurance, the employer has the power to select the insurance company, determine the coverage, and pick other benefits and features of the health plan.

This leaves little to no room to cater to individualistic needs. That being said, group health insurance offers comprehensive, all-around cover which should ensure all your needs are taken care of. 

2. Discontinuation -

The group health insurance cover is only active till the time you’re a part of the organization. Once you leave, the coverage is discontinued. This can be a concern, however, at such times you can always opt for individual insurance.

Pros And Cons Of Individual Health Insurance:

Advantages of individual health insurance:

1. Individuality -

The biggest benefit of an individual policy is you get to choose the one that’s tailor-made to fit your specific needs. Although group health insurance offers comprehensive cover, it doesn’t offer such individualism.

For instance, if your family has a medical history of critical illness, you can get additional cover accordingly.

2. Individual tax benefit -

One of the benefits of individual health insurance vs group plans is tax benefits. According to Section 80D, any premium you pay is deducted from your taxable income, thereby lowering your tax liabilities.

Disadvantages of individual health insurance:

1. Affordability -

The greatest disadvantage of individual health insurance is the cost, especially if you have pre-existing conditions or don’t have access to company health insurance of any kind.

You’ll have to shell out several thousands of rupees monthly or yearly plus, wait years before the coverage kicks in. Furthermore, individual insurance gets costlier with age.

Premiums significantly rise when you purchase an individual policy after the age of 50 as compared to a health policy when you are 30 years old.  

2. Waiting period for existing health problems -

If you look at group or individual health insurance, typically individual health policy has waiting periods for pre-existing conditions of up to 2-3 years, sometimes more.

And if you’re already living with conditions like thyroid, diabetes, blood pressure, etc. medical costs arising from these ailments are not covered until the end of the waiting period.

Thus, you have to bear the expenses from your pocket. Group health insurance on the other hand covers pre-existing conditions from day 1.     

3. Coverage -

Individual health insurance plans offers are customizable and designed to fit your every Individualistic, specific need. But most policies don't offer coverage for all types of conditions and diseases. You’re on your own and have to pay out of your pocket if you need care that falls into one of those gaps.

What Is The Difference Between Group And Individual Health Insurance?

It is preferable to compare group health insurance with individual health insurance and determine which is the best option. Let's talk about the differences.

Facts to Consider Group Health Insurance Individual Health Plans
Purchaser The organization purchases group health insurance for its employees. Individuals purchase individual insurance policies for themselves and their families based on personal needs.
Duration of the policy Group health insurance is directly related to the terms of employment, it ceases to exist when the employee is no longer part of the organization. The policyholder is the sole decider of the policy's duration.
Coverage The entire group gets uniform coverage with group health insurance policies. This coverage also extends to family members. Individuals can choose plans that suit the needs of you and your family.
Premiums The premiums are lower for group health insurance and typically paid by employers. Emplovees have to bear minimum to no cost. Compared to group health insurance, the premiums for individual insurance are much higher. And individuals must pay premiums regularly.
Eligibility If it's group health insurance, then nearly every employee of the organization is automatically granted group health insurance, irrespective of pre-existing diseases Based on financial or medical history, the chances of eligibility for certain plans and covers are limited.
Added benefits Even though premiums are lower, the features of group health insurance and its multiple benefits, some of which are free with your policy, are extremely beneficial. Besides health coverage, you get all-around wellness as well. With individual insurance, our cover is comprehensive: however, the added benefits are limited and typically come with a price tag.

Is Group Health Insurance Cheaper Than Individual Health Insurance?

The primary purpose of health insurance is protection and financial assistance. That being said, the cost of group health insurance is much lower as compared to individual health insurance.

Additionally, the premium is either paid by the employer or partially paid by employees where a certain amount is deducted from the salary. With individual health insurance plans, individuals have to pay higher premiums separately from their pocket.

Hence, picking group health insurance over individual health insurance is a sought-after option as it covers the desired needs.

Which Is Better In The Battle Of Group Health Insurance Vs Individual Health Insurance, And Which Should You Choose?

Firstly, you should always keep health insurance as a priority instead of an option. Especially today where people lead stressful lives, it’s essential to maintain overall health and wellbeing. 

Group health insurance is like killing a few birds with one stone - you get comprehensive health insurance, added benefits, lower costs, wider coverage, and a shorter waiting period. Plus, happier employees equals a happier workplace.

If you are a human resource manager, big business owner, or a small, medium enterprise, help your company benefit by taking a positive step. After all, you can’t predict the future. But you can certainly protect it!

At Loop Health, we offer optimum group health insurance schemes with free primary care and round-the-clock support. Our panel of specialist doctors brings you all-around care at absolutely no cost!

Whether minor issues are keeping you from reaching your productivity or major issues coming in the way of your life, you can always consult a specialist of your choice, anytime!

To know more about employee health insurance plans, feel free to get in touch with us.

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FAQs About Group Health Insurance Vs Individual Health Insurance India:

Below are some of the most frequently asked questions about individual and group health insurance.

1. How much tax benefit can I get from buying a group health insurance plan?

Tax benefits for employers: According to section 17 of the Income Tax Act, if you opt for group health insurance and pay premiums on behalf of your employees, the expense is considered as a business expense, and you can avail of tax benefits. So, group health insurance helps you reduce your overall tax liability.

Tax benefits for employees: Depending on whether you entirely pay the premium or partially pay it, under Section 80D of the Income Tax Act you can gain tax benefits.    

2. Can I enroll under both group and individual health insurance plans?

Yes, you can have both group health insurance as well as individual health insurance plans. Having two health insurance plans is perfectly legal.

3. Is small business health insurance cheaper than individual?

Yes, small business health insurance is cheaper than individual health insurance.

Group Health Insurance Vs Individual Health Insurance India
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