Articles

Group Health Insurance vs. Personal Health Insurance

by Michel Howdy Financial Advisor and Blogger

Before 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.

Group policies are definitely cost effective for employers and employees. Nonetheless, availing personal coverage is also advisable because group plans may be inadequate to meet all your requirements.

About HDFC Health:

HDFC Health is an initiative by HDFC Life, a life insurance company in India to help increase awareness, spread knowledge and enshroud myths surrounding the health insurance sector in India. As a wholly owned subsidiary of HDFC Life, HDFC Health offers health insurance policies in India that cover individual, family floater, critical illness and cancer care insurance plans.

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About Michel Howdy Junior   Financial Advisor and Blogger

1 connections, 0 recommendations, 13 honor points.
Joined APSense since, March 28th, 2016, From Mumbai, India.

Created on Dec 31st 1969 18:00. Viewed 0 times.

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