Are you looking for a Top-Rated Health Insurance plan in 2025?
And many of your friends suggested you opt for Individual Health Insurance over Group Insurance.
Well, if it is so… then I must say that they have suggested you a good option.
If you’re reading this blog, then you must be concerned about your health insurance and confused with so many options. Choosing the right plan for you and your family is becoming a daunting task.
Let’s understand the key differences between individual and group health insurance plans in this blog. What are the merits and demerits of both types and which one should you opt for?
Individual Health Insurance: Custom coverage as per your requirement.
- Definition: An individual health insurance plan protects only one person (you). It’s usually preferred by freelancers, self-employed individuals, or those without employer-sponsored coverage.
Note: Now, many individual health insurances come with a Family floater basis, where you can add your family along with you in your insurance plans.
- How it Works: You give your details to the insurer like your age, medical history in the past, any pre-existing condition, family genetic history if any, and then you pay a nominal premium to enter into a contract with the insurer. They agree to cover your medical expenses, up to a chosen sum mutually agreed upon by you and your insurer.
- Example: You buy a policy with a ₹15 lakh sum insured. After diagnosis with appendicitis and hospitalization costing ₹3 lakh, the insurer reimburses the cost (within policy limits).
- Benefits
- Customization: Choose features and benefits based on your needs.
- Portability: Keep the plan even if you change jobs. You can also change the insurer if you are not satisfied with the current insurer.
- Tax Advantages: You can enjoy tax deductions under Section 80D of the Income Tax Act.
- Drawbacks
- Higher Premiums: Individual plans may cost more compared to group health insurance plans.
- Medical Tests: Depending on age, sum insured, or pre-existing conditions, medical tests might be required.
Group Health Insurance: Employer-Sponsored Coverage
- Definition: Offered by companies or organizations to their employees as part of a benefits package. It covers a group of members with a common bond.
Note: No medical check-ups or pre-existing conditions are evaluated by the insurer under this plan.
- How it Works: The insurer issues a master policy to the group administrator (employer, bank, etc). The administrator pays premiums and extends coverage to all members of the organization under a single policy cover. You will receive a certificate from the HR department outlining your sum insured.
- Example: Upon joining a new company, you might be automatically enrolled in their group health plan.
- Benefits:
- Lower Premiums: Group health insurance plans typically have lower premiums due to shared risk among members.
- Easier enrolment: Often requires minimal documentation, like a health declaration.
- Pre-Existing Condition Coverage: Some group plans cover pre-existing conditions from day one.
- Drawbacks:
- Limited Control: You have little to no say in policy features or benefits determined by the group owner.
- Loss of Coverage: When you leave the company, then you’ll lose the coverage and remain uninsured till your next job.
- Tax Implications: If the group owner pays the premium, you may not receive tax benefits. (exceptions apply)
Difference between Individual vs Group Health Insurance
| Category | Individual Health Insurance | Group Health Insurance |
| Cost | Higher premiums as the risk are shared among single individual. | Lower premiums as the risk are shared with the group. |
| Enrolment | Customised self-purchased coverage based on your requirements. | Employers, societies and groups are enrolled into a single policy. |
| Cover amount | You can opt for higher sum insured options. | Employers decide the sum insured options, which is low. |
| Pre-existing Diseases | Certain exclusions in the coverage are there for any pre-existing conditions | Generally, they are not excluded from the plan. |
| Plan termination | Well, plan terminated only when you don’t renew your premium. | Group plan terminates as soon as you leave the organisation. |
| Options to buy add-ons | Depends on the employer | You can opt for add-ons on comprehensive health cover. |
| Claims | Cashless and Reimbursement | Cashless and Reimbursement |
| Tax Benefits | Tax deductions under Section 80D | Employer may/may not offer tax benefits |
| No claim bonus | Yes, it is available. | Not available |
| Medical check-ups before purchase | Yes, it depends on the insurer. | Depends on the policy taken by the employer. |
| Maternity cover | You can add it as an add-on cover | Available only if selected by the employer. |
Choosing the Right Plan: Individual vs. Group
Consider these factors before buying an individual or group health insurance for yourself:
Individual plans offer flexibility and portability, while group plans provide affordability and easier enrollment. The ideal choice depends on your unique circumstances. Now that you understand the key differences between individual and group health insurance, you can make an informed decision. Research reputable insurers and compare quotes to find the plan that best suits your needs. Remember, investing in quality health insurance is an investment in your well-being!
If you find it difficult to choose an individual health insurance plan for you and your family, you can book an appointment with us for a free consultation at www.algatesinsurance.in
