Nowadays many corporates provide the group health insurance policy for the benefit of their employees. It is a good gesture towards care and financial support to the family of the employees in case of illness. However, many employees get complacent with group health insurance and do not consider availing individual health insurance. While group health insurance is cost effective and easy to avail, the individual health insurance caters to specific medical needs. It is also essential to keep you insured after your retirement from the job.
The group health insurance ceases as soon as you are not part of the group. This is the most common case for employers group insurance. It ceases when you retire from the company or you leave the job. On the other hand, you can continue the cover of individual health insurance as long as you continue to pay the insurance premium. In uncertain time, if you lose your job, you will also lose your medical cover under the group insurance immediately. Hence it is strongly recommended to keep your individual health insurance to respond to emergencies in the challenging time.
The group health insurance is provided without medical tests within specified limits. However, the medical test is almost mandatory for individual health insurance, particularly above a certain age. Hence group health insurance is a boon, particularly for elder people or those having poor medical history.
The group health insurance policy is issued to all the group members uniformly. It is covered for the most common diseases and treatments. On the other hand, based on your medical profile, you can choose to customise your individual health insurance plan. You can also avail various riders to cover your specific medical needs.
While calculating per member cost, the group health insurance is much cheaper as compared to individual health insurance. In case of group health insurance, for the insurance company, the risk is spread across all the members of the group. Only a fraction of the group members raise the claim in a single year.
The premium of group health insurance is usually paid by the employer. In such a case,, you are not eligible for the tax deduction from your income. On the other hand, you can claim the deduction under section 80D of the income tax act for the premium paid by you for your individual health insurance policy. This provision effectively reduces your cost of individual health insurance policy.
No Claim Bonus
If you do not make a claim in your individual health insurance policy, you are eligible for No Claim Bonus(NCB) while you renew your policy. It reduces your overall cost of premium payment next year. However, such a provision is not available in group health insurance. In fact, in case of higher claims by other group members, the total premium payable is increased in the following year. If the employer chooses not to pay incremental premium, the sum insured may be reduced substantially for every member of the group.