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What’s the difference between group and individual insurance?

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Hello Gnees Army,

Good Morning,

Before we know the difference between group and individual insurance, let’s know what is that thing! Then we will go deeper…

In simple words, Group insurance is a contract between the insurer company and a group which may consist of lawyers, doctors, credit societies, members of cooperative banks, etc.

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And Individual Insurance is a contract between any person and the insurance company. Now let’s know the difference and pros and cons between them. Here we go…

Difference between group and individual insurance
Difference between group and individual insurance
TopicsGroup InsuranceIndividual Insurance
Limitations:The insurance contract or policy is drawn in the name of the group. You can’t use the policy for purposes like loans or such things.The policy is written for you. So you have much control than group insurance which allows you to apply for loans or such things.
Control:Your Insurance or coverage can be controlled and even cancelled by the group administrator at any time.Only you can decide on the policy what it should be discontinued or not.
Expensiveness:Group Insurance is less expensive than Individual as there are fewer papers and payouts.You may have to pay more in most cases for an individual plan.
Medical Check-ups: In a group health insurance, pre-medical check-ups are not conducted by the insurer, which reduces risk on policies being declined. But unless If you want coverage or policy beyond that, you may have to go through tests.Typically, Medical tests are almost always mandatory before buying an individual one.
Lastings:Group insurance is valid for as long as the employee is a part of the respective (means active in working) organization or company.An individual policy lasts as the individual wants and paying the respective premium for as long as for a specific period of time like on a yearly or monthly basis.
Deduction:Premium is deducted directly from the salary of an employee.Premium has to be paid individually for a specific period of time like on a yearly or monthly basis.
Flexibility:Group health insurance is primarily subject to the organization’s strength, both financial and employee strength etc.Insurance like individual health insurance is mostly made on the basis of an individual’s age, medical history, health conditions and financial status.
No Claim Bonus: With group insurance, unless you make a claim throughout the tenure (expiry) of the policy, you, as an individual, do not get any benefit of “No Claim Bonus”.With an individual insurance plan, unless you make a claim throughout the tenure of the policy, you’re eligible for a “No Claim Bonus” which can be thought of as a reward for being healthy and also as pocket-saving!



Now the main question, which should I prefer?

Group health insurance plans can be a real pocket-saver and affordable for both company and the employee. On the other hand, Individual insurance policies allow you to choose exactly what’s covered and what is not. You can decide which critical illnesses or diseases to cover based on you and your family’s medical history, family members, and even how much of a sum you are assured.

On the contrary, group insurance policies are limited according to the company’s policies and the willing of your employer. Also, its cover only lasts as long as you continue working for your employer. If and when it’s time to switch jobs, you may or may not receive health insurance anymore.

For the above reasons, it is advisable to get yourself an individual health insurance cover even if you are covered under a group plan to get the enjoyment of both juices!!

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