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How to Choose Between Individual and Group Health Insurance

Agnus Smith | Published: June 14, 2018

Tug of war

Insurance is an arrangement between a company and an individual or a group of people whereby the former provides a guarantee of compensation for particular losses such as illness, loss or damage to property, and death. Health insurance is a coverage that pays for surgical and medical expenses incurred by the insured individual or institution.

There are a few different types of health coverage, but the focus will be on individual health insurance and group health insurance. As much as the two aim at serving the same purpose, they differ significantly, and you might find that one is more advantageous to you than the other. This article discusses the two types of health insurance and helps you identify the one that would suit you best.

What is Group and Individual Health Insurance 

Group health insurance is coverage provided by an employer to their employees and the eligible dependents of the employees. With this type of healthcare, the employer selects the health plans that his employees will have, and the premium cost is usually split between these two parties.

Individual insurance, on the other hand, is health coverage that a person purchases for themselves and their immediate family members such as children and spouses. Health insurance companies appoint agents who help you navigate through the various options available and can even advice you accordingly.

The Difference Between Individual and Group Health Insurance 

Cost/Affordability

In economic terms, health insurance is a commodity that is purchased like any other product. This means that its demand and supply are affected by factors such as income or taste and preference. Group insurance is much like buying a particular good in bulk. This means that it comes with significant discounts that make it affordable to most people. In addition, group insurance premiums are deducted from salary directly, so employees do not have to pay for them once they get paid.

Individual health insurance requires the insured people to pay an out-of-pocket amount every other month or as often as required by the insurance companies. This type of health coverage is purchased like a single product, so there is no chance of getting a discount. However, there are more options available to you when you decide to enroll in an individual health insurance plan, which means that you can actually find coverage cheaper than group health insurance.

Typically, people tend to go with group health coverage if their employer offers it because of the lower sticker price (premium), however, some may not like the lack of options through group health insurance as they may not see a plan that fits their needs. Individual health insurance can be more expensive, but if you do your homework and compare rates in your area, you may be surprised at how affordable individual health insurance plans really are.

Long-term or Short-term

Group coverage is more of a short-term plan because it is dependent on the number of years you will work for a given institution or company. Normally, the onset of this insurance policy is shortly after being fully absorbed by your employer. It, however, ends when one resigns or once the contract with the company comes to an end.

Individual insurance requires more planning because it is more like a long-term investment on one’s health and that of their dependents. The coverage can only end if one decides to shift to another health insurance company or stop paying their premiums.

Group insurance coverage is convenient for anyone who is not particularly keen on a long-term investment in their health and is okay with whatever plan their employers pick. If you are looking for something that is going to last long and will not be affected by factors like a change of jobs, individual insurance quotes will be best for you.

Convenience and Control

Every individual who is an employee of a company that offers group insurance coverage is automatically eligible for the coverage. The chances of being denied are minimal, hence it lessens ones worry about failing to meet the required standards.

When it comes to control, one does not have a say over the insurance quotes or any other terms. Factors such as financial and social situations that determine the policy you get are spread over many individuals.

For individual health insurance coverage, one may be deemed not eligible for healthcare insurance based on specific factors like financial or medical situations. Some companies are, however, willing to offer customized health plans. Additionally, one has access to online quotes for various plans. There is freedom of choice that makes individual coverage more appealing. Also, access to various insurance quotes allows one to select affordable plans.

So Which Should You Choose?

Health insurance is not a one size fits all because what works for your colleague may not work for you. What you should do is explore all options available to you. Look over what your employer is offering, and compare it to individual health insurance options in your area. The web is a great place to start your search. First Quote Health offers third-party reviews of the top health insurance companies and instantly lets you compare the best rates in your area