Individual vs group health insurance: what is the difference?

What is the difference between individual and group health insurance?

Both give people access to private healthcare. Individual health insurance is taken out by a person for themselves or their family. Group health insurance is taken out by a company for its employees or owners.

What is covered and how to make a claim work in similar ways. The main difference is how the policy is run, including who pays the premium and who can make changes.

Individual health insurance is a contract between a person and an insurer. That person usually pays the premium and chooses the level of cover. Anyone insured under the policy can make a claim.

Group health insurance is a contract between an employer and an insurer. The employer usually pays the premium and decides what cover is offered. The members of the scheme, usually the company's employees, are the people who can claim.

What is individual health insurance?

Individual health insurance, also called personal health insurance, is cover you take out yourself. You can buy it directly from an insurer or through an intermediary. Health insurance provided by your employer is not individual health insurance.

An individual policy can cover:

• you only
• you and your partner
• you and your children
• you, your partner and your children

If a person takes out a policy that covers more than one person, it is still called individual health insurance.

How does individual health insurance work?

The policyholder is the person who signs the contract with the insurer. They pay for the policy and can make changes to it. Anyone covered by the policy, such as the policyholder's family, can make a claim.

Individual health insurance covers the cost of private treatment for acute conditions that first arise after the policy starts. An acute condition is an illness or injury that is likely to respond quickly to treatment. Medical exclusions and benefit limits may apply.

Depending on the insurer and the plan, individual health insurance can cover:

• inpatient treatment, where you are admitted to hospital overnight
• day-patient treatment, where you are admitted but do not stay overnight
• cancer treatment
• outpatient treatment, such as specialist consultations without a hospital admission
• other benefits, such as therapies, mental health support and a digital GP

What is group health insurance?

Group health insurance is taken out by a company. It is also called company, business or corporate health insurance. The policyholder is the company rather than a person.

The policy is often managed by a group administrator. This is usually someone in the company with decision-making power, such as the owner, finance director or HR manager.

Group health insurance usually covers a set group of people in a company, such as:

• the owners
• the management team
• the employees

Is group health insurance the same as family health insurance?

No. Family health insurance covers more than one person under the same policy, but it is still an individual policy because a person takes it out. Group health insurance means cover taken out by a company.

How does group health insurance work?

The group administrator chooses the cover and makes changes to the policy on the company's behalf. The company pays for the scheme, although in some cases the cost may be shared with members.

Anyone covered by the scheme can claim for private treatment of acute conditions that first arise after the policy starts. Like individual health insurance, a group scheme can cover inpatient, day-patient, cancer and outpatient treatment, and other health benefits. Medical exclusions and benefit limits may apply.

If an employer pays for your cover, it is usually a taxable benefit in kind, according to HM Revenue and Customs.

Summary

Individual health insurance is taken out by a person for themselves or their family. Group health insurance is taken out by a company for its employees. Knowing the difference can help when you compare the information available online.

Looking for health insurance?

Freedom Health Insurance offers individual health insurance for you and your family, and group health insurance for businesses.

Individual policies on Freedom Elite and Freedom Essentials can be arranged directly with us. Freedom Worldwide is arranged through an intermediary. Group schemes are arranged through an intermediary. Provided they have a Terms of Business Agreement in place with Freedom Health Insurance, they can request a quotation from us on your behalf.

If you are leaving a company scheme, read about what happens to your cover.