Group Insurance Pros And Cons In Layman's Terms

Jul 1
08:24

2011

Anna Woodward

Anna Woodward

  • Share this article on Facebook
  • Share this article on Twitter
  • Share this article on Linkedin

Group insurance plans offer some nice benefits but they also have their disadvantages. Health insurance is confusing for most people, so this article explains in layman's terms the general pros and cons of group plans.

mediaimage
If you're insured through the company you work for,Group Insurance Pros And Cons In Layman's Terms Articles you've got a group insurance plan. Group insurance means that there's one plan that covers all members of a company, organization, union or institution. It covers every member regardless of their age, health or physical condition. Let's take a look at the advantages and disadvantages of this system.

The Advantages

The main advantage of group insurance is that it offers lower premiums than any individual plan you'll find anywhere. This is especially nice when the economy is bad as it is right now. In recent years, enrollment in these plans has grown considerably. By collectivizing costs, it makes everybody's payment lower, in the same way that you can save money on something when you buy it in bulk.

As you get older, you'll find your premiums increasing. Once you're in your mid-forties, they start going up and they never drop back down. This type of plan is perfect for older people who are facing higher premiums. It puts them on an even footing with the younger members. While individual policies get increasingly pricey as you get older, the plan you have with your company or organization will stay more or less the same.

If you've got a pre-existing condition, a group insurance plan is definitely the way to go. Since everything is adjusted for all members, this medical condition won't affect your premiums. When you take out an individual policy you can definitely expect to pay more and you may even have trouble getting coverage.

The Downsides

The main downside is that plans are not customized to your needs. They'll usually have several different plans for you to choose from all with different premiums. These may include different features like optical, dental or other things. But it won't be like an individual policy where you can basically choose exactly what you need. In some cases, your company or organization may have only one plan for everyone. You have to either accept it or do without.

This might also mean that you won't be able to choose your doctor. If you have a favorite physician you've seen for years who is located close to your home, you may find yourself having to go across town to see someone you don't know. This is typical of HMOs and it's a big reason lots of people reject their company's plans.

The other main disadvantage is that when you leave the company or organization, your coverage ends. You then either have to take on another similar policy, or start from scratch with individual coverage. This can be complicated and costly.

One thing to keep in mind about group insurance is that, even though most people have it through their employers, that's not the only way to get it. It's offered for lots of organizations and groups outside of the work world. If you're interested in enrolling in this type of plan, see if any of the organizations you're part of offer it. It can save you money and keep you covered.

Categories: