Individual Health Insurance vs. Group Health Insurance

People get normally confused about the group and individual health insurance policies, but it is simple to understand the differences between them. Though both these policies provide similar type of coverage, but they are different in the terms of details. Normally, group insurance costs you lesser, but when it comes to protection then people prefer to go for individual insurance plan. To understand them better, keep on reading this article.

Group Health Insurance

Group insurance is an insurance package that an organization buys for its employees. It depends on the organization that whether it prefers to choose a pre-planned insurance plan from a company or want to design a self-insured plan. In group insurance, all the members are provided with a fixed and uniform cover. As all group members would not claim the same amount, the risk factor is balanced to great extent. And the members will remain covered by this policy up to the time till they are a part of the organization.

Individual Health Insurance

In contrast to its name, it is not strict that the individual insurance plan will cover only a single person. An individual insurance plan can be bought by an individual for himself, a group of people or for his family. This type of plan aims at catering to the individual needs and is customized accordingly. In this type of plan, the premium amount is determined based on the various specifications like age, medical history, health etc. The time for which the individual health insurance policy will remain valid is decided by the policy holder and the employment factors are not going to affect it. One of the main features of the individual health insurance is that it provides you the freedom to choose the things that you want to get covered in your insurance plan.

You may have got to know the basic difference between individual and group health insurance from the above discussion; however, here we are going to mention their main differences in brief.

  • The group insurance is registered on the name of group. So, you will not be able to use your insurance for the loans. In contrast, the individual insurance plan is registered in your own name; you can use it as an asset while applying for loans.
  • In Group insurance, policy provider has the right to cancel your coverage anytime but individual insurance plan can only be closed or discontinued when you will wish for it.
  • Group insurance plan cost you less as compared to individual plan.
  • In group insurance, premium will be automatically deducted from the salary, whereas in the individual insurance plan you are required to pay the premium at stipulated times.
  • Group insurance plans do not demand medical tests for a specific amount of coverage. But, in the case you want to get more coverage then you are required to undergo test. In contrast, you are required to undergo medical test before buying an individual health insurance plan.

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