Group vs Individual Health Insurance

Health insurance is a critical component of financial planning in India. While many employees rely on group health insurance provided by their employers, individuals can also purchase personal health policies directly from insurers. Both offer protection against medical emergencies, but they differ significantly in ownership, flexibility, and long-term reliability.

Here are 5 key things you must know before deciding between a group or individual health insurance plan:

1. Ownership

Group health insurance is tied to your employer. Leaving your job or the company discontinuing the plan can leave you without coverage.

Individual policies, however, are owned by the policyholder, continuing regardless of employment, offering lifelong protection and peace of mind.

2. Premiums and Tax Benefits

Group insurance premiums are typically lower since risks are pooled among employees. However, employees usually cannot claim tax deductions under Section 80D.

Individual health insurance may have higher premiums, but policyholders benefit from tax deductions and recent reforms have eliminated GST on these policies, making them more affordable than before.

3. Coverage and Flexibility

Group plans are standardised, limiting customisation. The sum insured may not always meet your personal health needs.

Individual policies offer flexibility, allowing additions like critical illness riders, maternity coverage, or top-up plans, tailored to your lifestyle and health risks.

4. Claim Process

Claims under group insurance often go through the employer, which can lead to delays or reduced transparency.

With individual policies, direct dealings with insurers make claims simpler and faster, ensuring easier access to cashless hospitalisation.

5. Continuity

A major drawback of group insurance is its dependence on employment. Individual health insurance continues regardless of job changes, ensuring uninterrupted coverage and long-term financial security.

Conclusion:
While group health insurance is a valuable employee benefit, it should not replace individual coverage. An individual health insurance plan guarantees continuity, flexibility, and tax advantages, making it a crucial safeguard for anyone serious about long-term protection.