A group insurance policy is an attractive way to lure bright minds to a company. And it is indeed beneficial because it covers the employee’s health care bills. And this perk extends to the employees’ spouse, children and dependent parents too. And that is why many people lull themselves into the misconception that the group policy is sufficient, especially because they do not have to pay a dime for the premium. And they push off purchasing an individual health insurance coverage plan till retirement. But if you are one of these people, this could really hurt you.
Is Group Health Insurance better than Individual?
The waiting period
A group insurance policy does not have any waiting period, but don’t forget that medical insurance plans for individuals come with this waiting period clause. A certain period of time (usually four years) has to elapse before you can claim the benefits of the policy. Suppose you purchase a policy in your sixties. If an illness is diagnosed right after, even if it is covered by your individual plan, it will not come to your rescue because of the waiting period.
Unlike a group health care policy, when you have to buy an individual health insurance coverage plan you will have to hand all your medical records over to your insurer. And if the insurer spots a pre-existing illness, the company may decline from selling you a policy. That is why you shouldn’t bide your time until you retire to get yourself an individual health insurance policy. An illness can strike at any time. And then it will be too late to buy a policy. Also, if you quit the company, then you will no longer be covered by your group insurance policy and you will be left unprotected.
The older you get, the more expensive individual health insurance coverage becomes. That is because you are more likely to become sick in your old age than in your youth. So insurers do a risk assessment and charge you a higher premium when you are at an advanced age (remember most insurers cap the entry age at 65). You would even have to undergo medical tests, which can prove to be a world of hassles. The younger you are when you purchase a policy the smaller the quantum of premium you have to pay.
Group health insurance alone cannot be counted on to have your back when your health fails you. You need individual healthcare plans as well. And the earlier you purchase it, the better.