Group Health Insurance vs. Personal Health Insurance
by Michel Howdy Financial Advisor and BloggerBefore discussing
which is better, between group and personal healthcare insurance, it makes
sense to understand both types of policies. Group insurance is an insurance
package availed by an organization for the benefit of employees. Companies may
select pre-planned policies or customize insurance coverage, as per their
requirements.
Personal insurance
is purchased by an individual for himself or herself. Individuals may include their
families within the personal insurance coverage. People must bear in mind that
personal insurance does not necessarily cover just one person.
With an
understanding of these 2 categories of health insurance, you must consider some
important factors before opting for health
insurance in India.
1.
Coverage Amount
With group health
plan, the insured does not have any control on the coverage amount. It is
determined by the employer. This coverage may be inadequate for covering all
your family members or to cope with rising medical costs. This flexibility is
available when you opt for personal insurance coverage.
2.
Job Switch or Loss
Employees are
covered under group health insurance plans only for the duration of employment
with the organization. If you lose your job or decide to quit for another job
or become an entrepreneur, the coverage under the group plan is no longer
available. Incidentally, if any hospitalization requirement arises during this
period, it can add to the financial burden. This can be avoided with personal
coverage.
3.
Difficulty Securing Health
Cover After Retirement
Post-retirement,
individuals covered under group plans may find it very difficult and often
costly to avail fresh health coverage. Sometimes, new coverage may not be
available after retirement. The reason could be an illness that significantly
increases the risk for the insurer, which requires paying a higher premium.
4.
Control
There are some
instances when individuals may be denied health insurance policies for medical
or financial reasons. This difficulty can be overcome under group insurance
plans because every eligible employee is covered by the insurance company. It
is easier to avail insurance coverage with group insurance plans. On the other
hand, with an individual, you have the freedom to set the policy terms and
choose when the policy can be discontinued. You can customize the coverage and
other terms based on your personal needs, financial and medical situation,
giving you complete control.
5.
Cost
Group insurance
plans are available at lower costs or even at no expense for employees. Unless
an individual opts for additional benefits, there are no extra costs that need
to be incurred on group policies. The premiums on these policies are deducted
from the salary. However, the premium on individual plans must be paid
separately, which may make it financially difficult for the person.
6.
Applicability
Individual plans
are applicable as long as you pay the premiums on a regular basis under all
terms and conditions outlined in the policy document. Alternatively, group
insurance is available only until the time you are employed by the organization
and is discontinued if you lose your job or quit.
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Created on Dec 31st 1969 18:00. Viewed 0 times.