Does it Make Sense to Rely on Group Health Insurance? - Greyfont

Does it Make Sense to Rely on Group Health Insurance?


In the bustle of daily life, we tend to delay purchasing a health cover, assuming that the employer’s owned cover is sufficient. However, we often fail to realise the fact that in the verse of changed lifestyle or growing inflation, living without health insurance can be toxic, as the rising medical cost may exhaust our savings. Also, remember that availing healthcare would be costlier as we grow older. In this regard, is group health insurance enough? Does it make sense to opt for an individual plan, despite being covered under group health insurance? Or is there something more? Let’s dig into detail!


Employer’s Owned Health Insurance: What is on offer under?

Under a group health insurance, you can cover yourself and your family including spouse, children or dependent parents. This policy startsworking from the very first day where you are covered for emergency medical expenses caused by accident or illness. The best part is, a person with pre-existing illnesses or a pregnant woman is also covered at a nominal premium.


Group Health Insurance Vs Individual Insurance

The basic difference between group health insurance and individual insurance is while the former is an employer’s owned policy, the latter is owned by an individual. Though both offer a similar cover, there are certain conditions which make them slightly differ from each other:


  • Premium: If we compare both the plan, group health insurance comes with a cheaper premium than an individual plan. The reason is, the risk for the company is spread over a group of people. On the other hand, you’re liable to pay a premium of Rs. 6000-7000 in case of an individual policy for Rs. 5 lakh. 


  • Waiting Period: While your individual policy requires you to serve a defined waiting period to cover pre-existing illnesses, the group health insurance will cover you from day 1. The waiting period may differ depending on the health condition and risk appetite. At times you may have to settle for a higher premium to cover pre-existing health condition under an individual policy.


  • Policy Customisation: Beyond a certain limit, your group health insurance can’t be customized. It’s entirely based on employer’s policy, employee strength and budget allocation. But it’s not the same case with an individual policy where you can customize the policy as per your requirements.


  • Portability: Individual health insurance plan comes with a strong feature called Portability, where you can switch the insurer in case you’re not satisfied. Even your group health plan can be transferred to an individual one. Provided you have left the job.


  • Tax benefits: Group health insurance doesn’t offer tax benefits. On the contrary, you can avail tax benefit for the premium paid for individual policy up to Rs. 25,000 and Rs. 30,000 for senior citizen policy, as per the provisions of Income Tax Act.


Over to You!

If you are sufficiently covered by your employer’s insurance policy, you don’t need a standalone policy. Around Rs. 5 lakh cover is sufficient if you are happened to marry in the near future or in your late 20s. However, be aware of the fact that your group insurance becomes null and void when you leave the organisation or start planning something of your own. At this point, you’ll require separate health insurance to provide a safety net and covers you for an emergency.


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