As an employee, you may get the chance to join a group insurance policy, but it’s common to feel unsure if it’s the right path for you. Even if you are already a part of a group insurance policy, it is a good idea to review where you’re at and see if it is sufficient for your needs. Let’s break it down, group vs individual insurance, so you can ensure you have the right coverage for your needs.
Group insurance is most commonly used for healthcare, although some also include dental coverage, but is it any good? The answer depends on your circumstances. If you don’t have individual coverage, it’s definitely a step up. But even if you have group insurance, you should investigate individual policies and compare them to ensure your policy includes everything you want it to and doesn’t have any nasty surprises.
What is a group insurance plan?
Employers often offer group plans as part of their benefits package. These group policies usually cover certain prescription drugs, hospital visits, and so on, but they have more limitations than individual plans. Group plans are an effective tool to keep employees fit, healthy, and productive. It helps employees manage unexpected medical costs that might crop up and prevent them from doing their job effectively. Some employers also include limited dental care, but this is yet to become the norm.
How is individual insurance different?
Individual insurance is more bespoke. Tailored to your needs, it can include special care for existing conditions, the ability to add on family members and more. While it can be more costly than group insurance, you will be better informed and be able to set the level of coverage with precision. It will also be simpler to amend your plan as needed. Surprisingly, in many cases, it can be cheaper to get an individual plan, despite providing more in-depth coverage.
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, are let go, or retire, you could find yourself without coverage while you shop around and arrange personal coverage. In the meantime, you will be entirely liable for any costs for you or your family. If you have developed any health conditions while you were employed and had group coverage and lose it because your employer cancels coverage, you leave your employment or retire and there is no retiree health plan, any individual coverage you then seek out will exclude any existing conditions. You own and control your individual health plan, with group insurance, you do not own it or control it.
Many group policies allow you to convert the policy to an individual one when you leave the role, but converted policies are usually much more costly than an equivalent plan set up independently.
Group plan advantages
Enrolling under a group plan can have advantages, however. Gaining coverage does not require any medical underwriting. Regardless of any health conditions, you will have coverage at a fixed price.
Getting individual standard health insurance does require medical underwriting, which means pre-existing conditions may be listed as exclusions. Specific types of health insurance do not require medical underwriting, but, as you would expect, these are usually more expensive.
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 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. This is inexpensive, less than a cup of coffee a day and is an invaluable product. Your health is your most important asset!
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 you pay more, year on year. With individual policies, you will get a fixed rate in advance so you won’t get any surprises.
The premium rate for group insurance is set by the demographics of those covered. 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
Many group plans do not include an option for critical illness coverage, 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, apply for individual coverage as a supplement. This policy can act as an add-on, providing additional coverage in specific areas. Let your insurance agent know that this is its purpose to avoid miscommunications.
Let’s talk about 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.