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Individual health insurance vs group health insurance: What’s the difference?

Individual health insurance vs group health insurance: What’s the difference?

 

Question: 
Is there much of a difference between individual health insurance plans, and group ones?

Answer: 

Health insurance products come in a range of shapes and sizes, yet they’re all designed to do something basic; provide financial coverage for medical costs. Now, while they all share the same basic goal, not all plans are created and utilized the same. There are some key differences when it comes to individual vs group health insurance plans, and knowing what these are can help you identify what type of insurance you need and to get the most out of your coverage.

Individual health insurance

An individual health plan is one that is purchased with a single insured person in mind. This might be someone buying health insurance for themselves, for their partner or children, or even their elderly parents. They will usually have higher premiums than group plans, but such packages can be more comprehensive and more targeted to covering personal, specific circumstances.

Learn more about individual plans here.

Group health insurance

Group health plans are exactly as their name describe; plans purchased for a group of members. Group coverage is commonly bought by employers for their staff, but others such as social groups and sports teams can also buy group health insurance to offer to members as well. Such plans can be cheaper “per head”, as risk can be shared across those insured, and sometimes coverage can be greater as a result. Compared with individual plans, however, some can feel less targeted towards a person's needs because of their general group nature.

Learn more about group plans here.

Individual vs group health insurance: pros and cons

Rather than simply outline the differences between the two types of health insurance products, here’s a table of the good and not-so-great:

 

Pros

Cons

Individual health insurance

  • More flexibility in tailoring of coverage

  • More control over co-pays, deductibles, and benefit limits

  • Choose which insurer you want

  • Portable; not dependent on your employment status

  • Higher premiums

  • Extra costs, or no coverage for pre-existing conditions

  • Lack of support for using the plan where some insurers and brokers are concerned

Group health insurance

  • Cheaper coverage for better conditions

  • Easier to gain coverage for pre-existing conditions

  • Some brokers offer extra administration and claims support to corporate clients

  • Coverage benefits and limits set by employer, not individual

  • Not all group plans are portable, meaning you lose coverage if you cease employment

  • Plan owned by employer, not employee

Do costs vary between individual and group health insurance plans?

When it comes to costs, the premiums paid for individual vs group health insurance plans differ greatly. For individual plans, it may depend on your age, gender, medical history; for group health plans, it may be calculated on the size of the group, their demographics, and the industry your company operates in.

Need more information?

Pacific Prime is dedicated to ensuring that you understand your options when it comes to insurance. You can do this by visiting our Individual or Group pages on our website, or by visiting our Guides page that holds a wealth of insurance-related resources - including our Cost of International Health Insurance reports that can give you information on what you can expect to pay for such plans.

If you’d like to talk to someone, our expert advisors will be more than happy to help talk you through the differences of individual and group health insurance options. They’re committed to our reputation for simplifying insurance, so contact our team today!


 
   
     
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