Recently, India’s corporate sector has been on a roller coaster ride regarding work pressure. A statistical report highlights that approximately 48% of the workforce is prone to mental health issues. As much as it impacts employers and their businesses, the ways these issues impact employees' lives are immense. Consequently, initiatives like a health plan have come into action with multiple benefits for employees to leverage.

Health or medical insurance plans are practical solutions to prioritise your well-being both as an employee and, in some cases, even your loved ones. At the same time, there’s an option to opt for either individual or group medical insurance. So, given their importance, understanding the distinction between them is extremely important. 

Let us present you with this quick guide on the advantages and limitations of both options, empowering you to choose the most suitable plan.

What is Group Medical Insurance?

A group medical plan, or insurance, is a policy an employer provides to you. It is an umbrella plan that covers a wide range of medical expenses for all employees. These plans often extend coverage to dependents, such as spouses and children.

Key features of a group medical insurance policy include:

• Shared Premiums: Employers often cover most, if not all, premium costs, making it highly affordable.

• No Medical Check-Ups: Employees are typically not required to undergo medical tests to be eligible for coverage.

• Immediate Coverage: Pre-existing conditions and maternity benefits may be covered from day one.

However, the coverage is tied to employment, meaning you’ll lose the benefits upon leaving the organisation.

What is Individual Health Insurance?

Individual health insurance is a personalised policy that an individual purchases independently. Unlike group plans, these policies are not tied to employment and provide comprehensive coverage for the policyholder and their family.

Key advantages include:

• Customisation: The policyholder can choose coverage options, add-ons, and benefits tailored to their needs.

• Continuity: The insurance policy remains active as long as the premiums are being paid, regardless of your employment status.

• Broad Coverage: Offers a wide range of coverage, including critical illnesses and higher sum assured options.

However, individual policies often come with higher premiums compared to group plans.

Also Read: Corporate Insurance Vs Personal Insurance.

How Does Coverage Differ Between Group and Individual Policies?

Here’s an interesting fact before you get to the coverage evaluation part. 50% of Indian employees have stress, which inflicts both physiological and psychological situations that may require professional medical assistance. Also, as per the Mental Healthcare Act 2017, such costs are covered under health insurance, so picking a suitable plan is a critical choice.

Here’s an overview:

What are the Cost Implications of Both Options?

The cost factor is significant when choosing between these two insurance types.

• Group Medical Plan: Employers typically bear a significant portion of the premium, making it a cost-effective choice for employees. However, the coverage may be limited, requiring you to rely on additional individual policies.

• Individual Health Insurance: Premiums are higher, but these policies offer long-term value through comprehensive coverage, customisation, and continuity.

How Flexible Are These Plans in Terms of Customisation?

Customisation plays an important role in ensuring that insurance policies meet individual needs.

• Group Medical Insurance: Limited customisation options are available since the employer predetermines the terms. Employees may be unable to choose their sum insured or add-on covers.

• Individual Health Insurance offers extensive customisation, allowing policyholders to add riders like critical illness cover, maternity benefits, and more.

This makes individual policies preferred for those with specific health concerns or financial goals.

How Does Portability Affect Your Insurance Choice?

Portability is an essential benefit to have incorporated into your health plan, especially in today’s dynamic job market.

• Group Medical Insurance: Coverage is tied to the employment tenure. Employees lose their coverage upon switching jobs or retiring, leaving them vulnerable to medical expenses.

• Individual Health Insurance: Fully portable, ensuring uninterrupted coverage regardless of employment status. This is particularly beneficial for retirees or those transitioning between jobs.

Employees are advised to secure an individual policy early in their careers to ensure continuity in health coverage.

Which Plan Offers Better Tax Benefits for Employees?

Tax benefits under Section 80D of the Income Tax Act are another crucial factor when evaluating these options.

• Group Health Insurance: You do not receive tax benefits for employer-paid premiums.

• Individual Health Insurance: Policyholders can claim tax deductions of up to ₹25,000 (₹50,000 for senior citizens) under Section 80D, making it a financially rewarding option.

While group insurance offers financial relief on premiums, individual plans provide significant tax-saving opportunities.

What are the Pros and Cons of Each Plan for Employees?

A comparative summary of both plans is essential for clarity:

Have You Made the Decision Yet?

Choosing between group or individual plans for corporate medical insurance depends on your unique circumstances, financial goals, and long-term needs. Group policies have their unique benefits, like convenience and affordability. On the other hand, individual plans ensure continuity, flexibility, and extensive coverage, making them a prudent choice for the long term.

Maintaining an individual policy alongside a group medical insurance policy is highly recommended for employees seeking the best of both worlds. For such balance, you can visit Niva Bupa’s official website. They have a range of health plans that offer you a variety of tailored coverage options.

Prioritise your health and start securing your financial future today!