Kamis, 12 April 2012

Individual Health Insurance and Group Health Insurance - What Is the Difference?


When you step into the world of insurance policies, its various types are easily going to baffle you. If you have just trodden into adulthood it is necessary that you embrace the basic knowledge of how insurances work, so that you can take the right step into the finances of your life from the very onset. Some of the basic coverage that you will need to purchase are perhaps,

• Health Insurance 
• Auto Insurance 
• Disability Insurance or Payment Protection Insurance and 
• Home Insurance if you live in a high-risk area.

However, it is not as simple as going to a provider and selecting the one you want because these insurances are further categorized into their various types. Nevertheless, in this article we are going to focus our attention on Medical Insurance alone as this is one of the most important ones and one that every adult should purchase at the very earliest.

Dividing the medical insurance into two broad spectrums, we can say that there is Individual Health Insurance and Group Health. There is a lot of misconception moving around about the two or, to be exact, what they mean.

Group Health Insurance is what is sold to a group. This could be a family or people working in the same company or environment. This concept is far from the truth. In reality, the Individual Medical Insurance, although purchased by a single person, can be for a single person or for his whole family. This type of insurance is bought privately and the individual is able to choose the terms and the coverage details and negotiate the term and the cost with the insurance provider directly.

Group Health, on the other hand, is sold to a company which purchase it for their employees. These can be bought directly from the insurer, however it is the company that makes the purchase and not the employee; therefore the employee has no say in it. Some companies also set up their own insurance plans for their employees; which means that an insurance company is not involved and the company has its own self-insured plan for the whole group of employees.

Because the group health insurance is purchased for a large group, the cost that is divided upon each employee is very less, making group insurance quite cheap as compared to individual health insurance. The group insurance plan also has fewer limitations; so if you are part of that group, you are automatically entitled to the coverage and so is your family, if they offer it.

However the employee is not able to make amends to the insurance plan according to his requirements or specific needs. The employer or the company is entitled to make changes whenever it is required without notifying the employee and the employee has no say in it. And it is because of this big disadvantage that even employees, who are offered group health insurance plan from their employers, seek individual health insurance as it suits their needs and individual medical requirement.



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