The world we are living in is so unpredictable that we can never know how our lives can change. Earlier, the belief was that only old people fall ill, but now we see that even a young person can fall sick at any point of time. And with such unpredictable environment that we live in, the need for an insurance policy is almost undeniable.

The market now-a-days is literally flooding with so many different health insurance policies that picking the right one for yourself becomes tedious and confusing. If you are already insured under the Group Health Insurance taken by your Employer, do you still need to have a separate Individual Health Insurance Policy? Are you facing the same confusion? If yes, you happen to be at the right place at the right time, for this blog will take you through the basic differences between a Group Health Insurance policy and Individual Health Insurance policies.

In layman terms, a group insurance policy is the one that is taken by an employer for his employees. This means the organization that you are working for has given you an employment benefit in the form of an insurance policy. An individual policy on the other hand is the policy that a person can handpick as per his needs and requirements.

A Group Insurance policy may cover only the employee or his family members as well – it depends on the Employer the kind of benefit he wants to provide to his employees. In some cases the entire premium (or part of it ) is borne by the Employer, while in other cases the entire/balance premium may have to be borne by the Employees. Normally the coverages that are available in a Group Health Policy are much more exhaustive than Individual Health Policies. For example, in a Group policy, normally, pre-existing conditions are covered from day 1 while in case of Individual policies some ailments are covered only from the 2nd year, 3rd year or 4th year onwards. This normally gives the impression that if one is already covered under a Group Health policy, there is no need for taking a separate Individual Health policy.

However, we strongly recommend that you should always have a good Individual Health policy covering your entire family – even if you are already covered under a Group Health policy. The reasons for the same are :

a) The amount of coverage provided in a Group Health policy is normally limited to around 5 Lacs for an entire family – which is not enough keeping in mind the high cost of treatment of some ailments. It is better to have an Individual policy to supplement the coverage.

b) Your coverage will end the moment you leave/retire from the Organization but in case of Individual policies, you get lifelong Renewals.

c) More options are available to younger people compared to older people. Individual policies for Older people normally come with some restrictions.

d) In Individual policies, for every “Claim free” year – the coverage amount increases as you earn “Cumulative Bonus” – in some cases as much as 50% of the basic amount. The same is not available in Group Health policies.

e) It is more expensive to buy an Individual Health policy at a higher age than at a younger age.

f) You will also get Income Tax benefit.

So, the idea is to buy an Individual Health policy the day one starts his career and continue the policy throughout. Just to do a rough calculation, if you take Health Insurance policy at the age of 25 for you and your family and pay an average premium of (say) 30,000/- for the next 50 years à your outgo is Rs. 15 Lacs à so basically at the cost of a mid range car you can buy protection in term of Health Insurance for your family for the next 50 years.

So our recommendation is, buy a Health Insurance policy for yourself and your family TODAY and continue it lifelong. The sooner the better.

Hope this helps!