Do you still need a retail policy if you are covered in a group policy?

A group health insurance, as the name suggests, is an insurance policy meant to provide health coverage to a group of people or community. Such insurance policies are generally bought by employers to provide insurance benefits to the employees in their organization.

A retail policy, on the other hand, is a type of policy that you buy from intermediaries such as a financial adviser or an insurance policy comparison website, rather than the insurance company itself. Retail policies are individual health insurance plans bought by individuals to get health coverage for them.

Although both group and retail policies seem to provide similar coverage, it is the nitty-gritties that you must consider to better understand the difference.

Since group health insurance plans are provided by the organization you work for, the premium too will be taken care of by your employer. You may however need to bear the extra expenses in case you are opting for additional benefits or covers along with your plan

Now as far as a retail health insurance policy is concerned, you yourself will be responsible for the paying the total cost of policy purchase (premium and additional benefits’ costs included). Retail policies however tend to be a little cheaper in comparison to direct policies.

Many modern day retail individual health insurances offer a wide range of coverage such as pre and post hospitalization, daycare procedures, OPD, and so on. While some individual policies come with extended family coverage options, policyholders can always purchase add-ons to get their family members (wife, dependent children, and parents) covered under their policy, in absence of an extended cover.

Group health insurances, on the other hand, are essentially meant for covering the employees in an organization, and may or may not cover their families. Even though the range of coverage provided by group health insurance policies is generally limited, a few group insurances do cover pre-existing diseases and maternity expenses.

As is the case, individuals must first meet the eligibility criteria in order to qualify for a health insurance policy. Many a times, even eligible candidates are denied an insurance policy owing to issues such as discrepancies in documentation etc

However, this is not the case with group insurance policies. All the employees in the organization are eligible for group health insurance policies, and shall be covered under it till the time they are employed by the said organization.

Besides, group insurance policies also allow claims in the first 30 days of purchasing the policy, which does not happen with individual health insurance plans. In case of the latter, you have a waiting period of 30 days before you are covered under the policy, and can only make a claim if it is an emergency.

Individual health insurance plans can be customized, but that certainly isn’t the case with group health insurance policies.

No Claim Bonus is an additional benefit that insurance companies offer at the time of renewing the policies. Also known as NCB, this is offered in the form of a discount in policy premium, and is a reward to the policyholder for maintaining good health and making no claims throughout the term. This sort of a benefit generally comes along with an individual health insurance policy, and isn’t offered in group insurance policies.

Which is better – group health insurance or retail policy? Which should I buy?

These are common questions that bug every insurance buyer at one point or the other. The answer to these questions lies in understanding the difference between the two policies, analyzing your needs, and then making the call. Often employees, especially in the corporate sector, who are covered under some kind of group health insurance policy, do not give much thought to all these. And this is certainly not the path that you should be taking.

Even though you would be paying for a retail individual health insurance from your own pocket, the benefits you shall reap will be well worth the insurance premium. These insurance policies cover you as long you make timely premium payments, and your term continues. Whereas, group insurance policy coverage ends the moment your employment does. This means if you happen to lose your job due to whatever reason, or quit it, you are no more covered. You also do not receive any post retirement coverage under such polices.

In many sense, group insurance policies are more like “one size fits all” kind of policies, meaning they have a standard set of medical coverage, and cannot be customized. Commonly, the financial coverage that they offer is also around somewhere around 1.5-2 lakh rupees, a sum which may not be enough if a serious medical issue was to occur. The most important point however remains that group insurance policies are like a perk that employers provide to their employees, and just like any other perk, they can be revoked at any point of time, if your employer feels the need for the same.

An individual health plan not only offers you extensive health coverage, but can also be customized to suit your need. Moreover, it can be reviewed and renewed at the end of the term, to keep your health insurance up to date with the changing times.