Page 154 - Ebook health insurance IC27

The Insurance Times

In contributory schemes, the beneficiaries (employees) share the premium
whereas in non- contributory schemes, only the employer or the affinity
organization contributes to the premium. Normally, employee premiums are
paid by employers to avail of corporate tax benefits, and also serves as an
attractive feature for recruiting the people and retaining them.

Q15. Write the key differences between Group and Individual policies.
Ans. Some key differences between Group and Individual policies are:

(i) Individual plans havestandard terms and conditions whereas group insurance
policies generally have customized terms and conditions attuned, according
to the nature of the group. For e.g, individual policies do not cover maternity
benefits, but group policies do.

(ii) The premium for the individual policies are standard ones, whereas premium
charged in group policies are often discounted ones. Increasing costs of
medical treatment are becoming apparent to corporate consumers, and
they are exploring ways to reduce the costs of insurance coverage, including
cost sharing mechanisms like deductibles, introduction of contribution of
premium from employees to cover their dependent parents etc.

(iii) Individual policies offer Cumulative bonus i.e, 5% increase in sum assured
for every claim free year, subject to accumulation of maximum 10 yrs. In
the event of a claim, the increased amount reduces by 10%. Group policies
do not offer this bonus.

(iv) In individual policies, the insured are entitled to reimbursement of medical
checkup ( including Cumulative Bonus ) , once every 4 no-claim years. The
amount reimbursed shall not exceed 1% of the average sum insured during
these block of 4 years.

(v) Individual policies are not subject to Bonus/Malus, whereas Group policies

158 Guide for Health Insurance