Health insurance is an insurance against expenses incurred through illness of the insured. A health insurance policy may be categorized as an individual plan or a group plan. An individual health insurance policy only covers one individual while a group health insurance policy covers an entire group of individuals. Group health insurance plans are usually availed by employers as part of its benefit package. If an individual is already enjoying the benefits of a group health insurance plan, does he or she still need individual health insurance? There are pros and cons to group health insurance that must be considered to answer this question.

Group health insurance

Group insurance is a type of insurance that covers all eligible individuals within a certain group, no matter their physical condition or age. Group health insurance is usually provided by employers to their employees, but there are also other groups that provide this type of health insurance. Examples of these are trade and professional associations, unions, and governments.

Pros of group health insurance

The best advantage of group health insurance is that it is cheaper than individual health insurance. This is because risk is distributed in the group, low-risk and high-risk people are pooled together. Another factor that makes group health insurance less expensive is the contribution of employers to the insurance premium. Some companies even provide health insurance for free, meaning employees do not participate in premium payments. Cost of health insurance for additional dependents is also cheaper if availed within a group health insurance plan.

Cons of group health insurance

There are disadvantages to group health insurance. First, the person insured does not have a choice, or has limited choice, in terms of group health insurance features (treatments, tests, illnesses covered, etc.). For example, dental benefits are not always covered by group health insurance and may not be offered. There are even cases when only one plan type is offered to all employees. Another disadvantage of group health insurance is the possible limitation on the clinics, hospitals, doctors, medical laboratories, etc. one may go to for consultation and treatment.

There is no doubt that group health insurance is cheaper than individual insurance. However, for people who want or need customized health insurance benefits, it may be a good idea to avail individual insurance instead, especially if they are willing to spend extra money on their health insurance. For people with pre-existing conditions who would otherwise be made to pay higher individual insurance premium, group health insurance is probably a good option. People considering group health insurance must always weigh its pros and cons.