What is the Major Difference Between Group and Individual Insurance?
Health insurance is one of the modern necessities of mankind. In the past, man may have not thought that this is necessary but at present, it is a must especially if you wish to have a more guaranteed savings in your medical expenses.
Types of Insurance Policies
Group health insurance is typically offered by companies to their employees. Companies prefer this type of insurance coverage because it offers the minimum requirement for any company or business owner at an inexpensive price. While others, choose this not as their primary insurance policy but as a supplemental insurance program.
Most of the time, group health insurance policies are paid by the company and is equivalent to twice or thrice your annual salary. This is an additional benefit which they provide to their employees in exchange for their services and loyalty to the company.
Individual Health Insurance
This type of policy is purchased by individual because of the personalized benefits it offers to its policy owners. You decide on the amount of premium you wish to pay every year side by side with the future benefits you wish to acquire. Nevertheless, qualifying for a specific policy may be more complicated compared to group health insurance but the benefits you and your family will get in the future will certainly be appreciated.
Major Differences Between Group and Individual Insurance
Guaranteed Coverage Amounts
Group life insurance provides a guaranteed amount of coverage which means no medical examination is necessary for you to qualify for the coverage. On the contrary, individual health insurance requires all applicants to undergo medical examination before their policy can be approved.
Individual health insurance is rated based on the applicant sole lifestyle, medical history, and social affiliations but with group health insurance policy you will be rated based on an experience approach. The rate you need to pay will not be predetermined by your health condition but the assessment of the entire group which you belong to.
Billing and Administration Systems
Typically, most insurance companies which provide group life insurance policies hire a particular administrator who handles the account of a specific group. The administrator monitors the payment and benefits claims of each member of the group. He or she sees to it that all requests made by the members of the group are in line with the agreed upon certificate of insurance. On the other hand, individual health insurance is managed solely by the policy holder or his attorney-in-fact.
Electronic Funds Transfer
Both types of insurance policy offers electronic funds transfer but this is more often done in individual life insurance policies because group policies normally deduct premiums through payroll deduction.
The increase in the scope of coverage for group health insurance is easier. You need to present legal documents if you wish to include your wife, child or parents into the policy. Your premium may rise a bit but it is not that complicated compared to individual insurance which requires a reassessment of your entire application.
Individual health insurance is preferred by individuals who are financially capable of purchasing their own policies but if you are not in the position to purchase one then having a group health insurance will do you great benefits in the future as well.