Individual Health Insurance vs Group Health Plans

Every individual must buy a health insurance policy. With age, come uncertainties. It is always wise to be prepared for the worst. Individual health insurance is excellent as it is a defence against a much-unwanted health-related surprise that life might throw at you. A health insurance policy not only provides you protection but also allows you to enrol your entire family and offer them health protection at an affordable cost.

A group health insurance policy is different from an individual one, read ahead to know more:

Difference between Individual Health Insurance and Group Health Insurance

An individual health insurance, as the name suggests, covers an individual against health risks. Similarly, a family floater policy covers not just the individual, but also his or her family against the risks. The premium will be based on the sum insured, i.e. the maximum amount that the insurance provider would pay for the medical treatment. In case of individual health insurance, it is the compensation that the insurer pays to the insured for treatment of an illness, especially if it involves hospitalisaion. Health insurance can also be availed for treatment if the policyholder meets with an accident.

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The insurance plan which an organisation purchases to provide health coverage for their employees or group members, as well as their family, is known as group health insurance or group mediclaim policy for employees.

Now let us look at some more aspects that affect you as a policyholder.

Insurance Cost

Group insurance cover costs less compared to an individual policy. Some group policies, especially from employers can have no premium burden on an individual as it is paid by the employer. However, employees have an option to get additional cover or benefits for their family, children, and spouse at the cost of additional premium. Premium in this case is a small amount and is deducted from the monthly salary of the employee.


Before issuing a health insurance policy, the insurance company conducts its own due diligence including medical tests to ascertain the risks involved. If your health is in good form, you would easily get an individual health insurance policy. However, certain situations are based on the medical history of an individual that leads to the rejection of an individual health insurance policy. With the help of a group insurance policy, you can get your family members also covered. This can be true even if, in some cases, the family members might find it difficult to get an individual policy due to medical history. The group insurance providers usually don’t look into the individual employees but the number of employees to get insurance cover for themselves and the entire family.

Cumulative Bonus

Cumulative Bonus or CB is a benefit offered by health insurance plans. Under this, if you do not make a claim in a single financial year, you will be entitled to a concession on premium renewal or an increase in the insured sum at the same premium. Almost every individual health insurance policy provides you with this benefit.

However, under a group insurance policy, even if an employee does not make even a single claim over the financial year, you won’t be entitled to any NCB. You won’t get NCB with any group insurance plan.

The validity of the plan

An individual health insurance plan will be applicable at all the times until the policy is discontinued, as long as you pay the premium on time. Whereas under a group insurance policy, you’re entitled to receive coverage as long you’re employed within an organisation or are part of the group. As soon as you resign, the group cover will cease to exist.

The most important point to keep in mind is that health insurance shouldn’t be an option. Instead, it must be a priority. It is important to understand what is health insurance, why you need it and how can you make the most out of your coverage. While both group as well as individual health insurance plans have their benefits, having two health plans rather than just one could be better because if one insurer rejects your claim, you can go back to the other one. Therefore, both group and individual health covers are beneficial. Always remember to compare health insurance policies online before choosing one!


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