Maybe your employer offers group insurance, and you are unsure if you should join; Maybe you have group insurance but aren’t sure if it’s sufficient for your needs. Either way, we’re going to break down group vs individual insurance once and for all so you can get the right coverage for your needs.
Group insurance can be offered on healthcare and dental policies but is it any good? The answer depends on your circumstances. If you have no existing individual coverage, it’s better than nothing. But, even with group insurance, you will want to investigate individual policies to ensure you are covered for everything you want to be and don’t have any nasty surprises.
What is a group insurance plan?
Employers often offer group plans as part of their benefits package. It usually covers certain prescription drugs, hospital visits etc. but, they are limited. Group plans are an effective tool to keep employees productive and manage any unexpected medical costs that might crop up and prevent them from working. Some employers also include limited dental care.
How is individual insurance different?
Individual insurance is more bespoke. It is tailored to your needs, including special care for existing conditions, adding on family members and more. While it can be slightly more costly than group insurance, you will know precisely the level of coverage you have and will be able to change the plan as you go. And in many cases, it will be cheaper while providing greater benefits.
Group vs individual insurance
The main advantages of individual plans are flexibility and security. A group plan only remains while you stay in your current employment. If you leave the role, be let go, or retire, you could find yourself without coverage for a period while you shop around and get personal coverage arranged. In the meantime, you will be entirely liable for any costs for you or your family.
Many group policies allow you to convert the policy to an individual one when you leave the role but, these converted policies usually work out to be much more costly than an equivalent individual plan set up independently.
Group plan advantages
Enrolling under a group plan can have advantages, however. Gaining coverage does not require any medical underwriting. This means, regardless of any health conditions, you will have coverage at a fixed price.
Getting individual health insurance does require medical underwriting, which means pre-existing conditions will be excluded from coverage; a fact most people aren’t aware of.
Group plan issues
Group benefits won’t last forever; you could lose access to those benefits at any time as the employer owns the plan. You could also lose the benefits due to career change, job loss or even due to retirement.
How can you protect yourself and guarantee access to an individual plan with no exclusions, even if you lose access to your group benefits?
For your best protection, we highly recommend the Assured Access plan to protect your insurability no matter what the future holds.
Costs and premium hikes
If you are part of a group plan, premiums can go up through no fault of your own. Premiums are based on the group claims as a whole, so even if you make no claims, you may find your premiums climb year on year. With individual policies, you will get a fixed rate in advance so, you won’t get any surprises.
Additionally, the premium rate is set by the demographics of the group. If your colleagues are 20 somethings that love to work out, you could be on to a winner, but if you work with 50 somethings that prefer a more sedentary lifestyle, you may be paying more than you should.
Even if you stay in your current role, your employer can cancel the policy at any time. Just as if you left the job, you could find yourself scrambling as you could be out on a limb without sufficient coverage.
Critical illness cover
Most group plans do not include an option for critical illness cover, as the workplace is only invested in you so long as you are fit to work. Individual coverage allows you to add on critical illness cover, giving you and your family peace of mind should the worst happen.
Already have group insurance?
If you already have a group health insurance policy and want to keep it but aren’t happy with your level of coverage, you can apply for an individual policy as well. This policy can act as an add-on, providing you with additional coverage in the areas you need. You just need to let the insurance agent know that this is its purpose to avoid miscommunications.
Let’s talk policies
Group insurance can have its place, but it is unlikely to provide sufficient coverage for your needs. If you are considering a group policy or have one already, please get in touch to discuss where you need extra coverage and get a free quote.
Blue Country Insurance – all your protection under one roof… because your health and life matters.