Difference Between Group Insurance & Individual Health Insurance | Vital

Difference Between Group Insurance & Individual Health Insurance – Everything You Need To Know

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There are different types of health insurance plans available in the market. They mostly differ on who they are catering to. The two most popular types are group insurance and individual health insurance. While individual health insurance can be bought by everyone, group insurance plans only cover employees of a particular organization.

Group insurance is now a  mandatory part of every employment contract. It covers employees as well as their family members for hospitalization expenses. There is usually day one coverage on these policies but the coverage amount is quite low. Individual policies provide higher coverage but usually, come with a waiting period. The other major difference is that you will have to pay the premiums yourself for an individual policy, whereas the company usually takes care of the premiums for corporate insurance. 

Today we will look at some of the major differences between a group insurance policy and an individual health insurance policy. While group insurance covers almost every professional today, it is not enough to cover the financial risks related to health emergencies. This blog will help you make a more informed decision on how much individual health cover you should be looking at, over and above your existing health cover.

Six Difference Between Group Insurance & Individual Health Insurance

The Validity Of Coverage

All health insurance policies today come with lifelong renewability which means that you can keep renewing the policy every year (until the death of the policyholder). However, for group insurance, the policy will cover you only as long as you are an employee of the particular organization.

While all policies offer renewability for life, the entry age is capped differently for different providers. The entry age limit for most policies is capped at 65 years; however, a lot of insurance providers have taken this cap off. This means that you might be able to buy the policy only until you are 65 years of age, but you can renew it forever after that.

The Sum Insured In The Policy

Group health covers have a fixed sum insured or cover amount that is common for all employees. For example, an organization might decide to cover their employees with a 5L insurance package – in that case, every single employee (whether they have family members added to the plan or not) gets a 5L coverage. It is predetermined by the organization and does not depend on your individual requirements.

Individual policies, on the other hand, give you complete flexibility to choose your coverage and benefits. You can base it on your current health status, your financial requirements, and any unforeseen health risk that might affect you.

Medical Screenings Needed Before Buying

Medical tests are not mandatory for an employee to avail of employee insurance benefits, even if they have a pre-existing disease. On the other hand, individual health insurance will usually ask for medical screening or at least underwriting over the phone if you have a health condition.

The Cost of Premiums

Employee insurance is usually on the employer’s account and employees are not asked to pay for it. The premiums are actually higher for these policies because they generally don’t have any waiting period and come with coverage for a lot of conditions that may not always be available with individual health insurance.

One of the biggest pros of retail policies is flexibility. You can customize your coverage not just based on health conditions but also around what your budget is as well as the dependents you want to cover.

Benefits for Dependents

An employee can utilize their insurance policies to add family members (spouse, children, and parents) into a group insurance policy. Moreover, group health insurances are open to provide maternity benefits to expectant mothers. However, the downside would be the limitations to dependents and the inability to add more than the specified number of family members. 

Individual insurance can also avail for family coverage that provides discounts in premium payment and also welcomes new members to the coverage. You can also opt for deductibles as options to save expenses.

Tax Benefits

Tax benefits are usually not available for group insurance because the premiums are paid by the employer. In case, there is a part of the premium that you, as an employee, are paying, you can file for tax deductions on the same. 

If you have an individual policy, on the other hand, you are eligible for tax deductions of up to Rs 25,000 under Section 80D under the country’s Income Tax Laws.

Final Words

Health insurance is essential today. Whether you have a condition or are healthy as a horse, insurance is a great way to keep your finances secure. Nowadays, new-age insurtech startups like Vital are doing their bit to disrupt the market by going beyond regular health insurance coverage without putting a dent in the policyholder’s pocket. 

As 21st-century consumers, we need to remember that today our health expenses are not limited to big hospitalizations but revolve more around smaller ones we incur through the year, be it doctor consults, medicines, diagnostics, and so on. With the ongoing medical inflation and the explosion in health expenses, it is of paramount importance that we start preparing for these smaller expenses and look for health insurance that will actually help us do that.


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  1. Hello Vital,

    This is a very good post. But can you explain some more things related to group insurance?

  2. Your mode of describing all in this piece of writing is in fact pleasant, all be capable of simply be aware of it. Thanks a lot.

  3. Really interesting information, I am sure this post has touched all internet users, it is a really pleasant piece of writing on building up a new website.

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