When it comes to health insurance, individuals have two primary options: group health insurance and individual health insurance. Both types offer protection against financial loss due to medical expenses, but there are significant differences between the two.
In this article, we will examine the contrasts between group health and individual health insurance to help individuals make more informed decisions about their healthcare coverage.
Group health insurance
A group health insurance, as its name suggests, covers a group of people, typically belonging to the same organisation or employer. Employers often offer group health insurance as part of their benefits package, as it enables them to provide affordable healthcare coverage to their employees. The premium for group health insurance is typically lower than the premiums for individual policies. A group health insurance often provides coverage for preventative care, such as routine check-ups, as well as inpatient and outpatient medical procedures, and prescription medication.
Individual health insurance
Individual health insurance, as the name suggests, is purchased independently by an individual. An individual healthcare policy is available for purchase through the healthcare marketplace or an insurance provider. In contrast to group health insurance, individual health insurance premiums are typically higher as the risk is concentrated on an individual rather than a group. Despite this, purchasing individual health insurance is a viable option for those who do not have access to group health insurance and cannot afford to pay for medical expenses.
Group health insurance vs individual health insurance
The following table outlines some of the primary differences between group health insurance and individual health insurance:
Category |
Group health insurance |
Individual health insurance |
General meaning |
Health insurance policies which provide coverage for group of people. |
Health insurance policies applicable for individuals based on their specific requirements. |
Cost |
Lower premiums due to group spread risk |
Higher premiums due to individual concentrated risk |
Enrolment |
Employers, groups, and societies |
Self-purchased coverage |
Coverage |
Low sum insured options available |
High sum insured options available |
Pre-existing conditions |
Generally, they are not excluded |
There are certain exclusions in the policy |
Plan termination |
Terminates if the connection with the group ends. For example, if an employee leaves a company. |
Individuals can terminate as and when needed |
Who is insured? |
Employee or members of organisation. |
Individual who purchases the policy. |
Who is the purchaser? |
Employer or the organisation. |
Self |
How much control does the insured have over the plan? |
Insured can get coverage as chosen by the employer or organisation. |
The insured individual has full control over the plan. |
Option to buy add-ons |
Depends on the employer if wants to add or not. |
You can get add-ons on comprehensive health insurance plans. |
Claims |
Cashless and reimbursement claim settlements. |
Cashless and reimbursement claim settlements. |
Eligibility criteria |
Only individuals above 18 years get enrolled under the policy. Upper age limit depends on the policy chosen. |
Only individuals above 18 years get enrolled under the policy. Upper age limit depends on the policy chosen. |
Tax benefit |
Available |
Available |
Maternity benefits |
Available but only if selected by the employer or organisation. |
You can avail it as an add-on cover. |
No Claim Bonus |
Not available |
Available |
Medical check-ups before purchase |
Depends on the policy and insurer. |
Depends on the policy and insurer. |
