Group Insurance Vs Individual Cover: What Should You Opt For?

Have you recently joined an organization that is offering you insurance? Yes, this can be a tough situation where you are stuck between choosing a group policy that costs no money and a term plan that secures you no matter what. So, to make this easier for you, here is a comparison of the two policies to help you pick the most favorable option.

What Is Group Term Insurance Plan?

Group term insurance plan is a policy you become eligible for you when you join a company. You will be apart of this insurance plan as long as you are with the organization. This type of insurance policy does not have a maturity benefit but gives out a lump sum payout in case of death.


  • No medical check-ups required to find out pre-existing ailments
  • Tax benefits
  • Simple and secure plan
  • Optional rider benefits are available

What Is Term Insurance Plan?

An individual term plan is a life insurance policy which offers you a life cover for the entire policy term by paying premiums on a regular basis. Such a plan provides a financial backup to your loved ones in case something unfortunate happened to you. You can also choose the amount of death benefit by understanding your family’s requirements.


  • Sum assured can be customized
  • Tax benefits
  • Secures you for the whole policy term
  • Riders can be added to the plan

Here are certain aspects which can be used to compare both the plans to help you understand which policy you should opt for:

1.   Cost of the Policy

A group insurance policy costs less when compared to an individual insurance plan. Some companies even bear the cost of the premiums leading to employees paying nothing for the group insurance. This is a good option for people who don’t want to shell out money for such purposes. While group insurance plans are cheaper, individual policies offer customized features and benefits.

2.   Eligibility Criteria

Individual insurances have certain criteria for you to be eligible or else you might have to pay a hefty cost to get a policy. On the other hand, group insurance plans do not have such standards to be eligible. As long as you are a part of the organization, you can get coverage.

3.   Validity of the Plan

While individual insurance plans are valid for the entire policy term chosen by you, group policies remain valid for the period you are employed. When you leave the company, you are no longer a part of the group insurance and have no coverage.

4.   Benefits of Insurance

Group insurances are affordable and sometimes do not even cost you a penny as the company pays for it. But they cannot be customized and do not give numerous perks that can be availed by getting a term policy. An individual policy enables you to choose the policy term and the amount of sum assured based on your family’s needs. You can also choose to add riders like critical illness rider, waiver of premium, income benefit rider, etc. to overcome those dire conditions.