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How does individual health insurance differ from group health insurance? Health insurance can be hard to understand and involves many different parties - from the insurance company, underwriter and of course the customer! Learning about the different types of health insurance policies that are available will go a long way to demystifying the process. Let's start by understanding the differences between individual and group health insurance.
The main difference between group and individual health insurance relates to providing proof or 'evidence' of insurability. A person who wants to buy individual health insurance will need to provide answers to questions about his or health and be prepared to have a medical examination to establish their good health. In other words the insurer must know that the person is in good health at the time the policy is undersigned.
You might be declined if you fail a medical exam based on personal habits, health status, medical history, income or your age. Alternatively you may be granted individual health insurance under certain limitations.
What about group health insurance? Unlike individual health insurance, group health coverage is typically granted without a medical exam because it covers a group of individuals. This group is considered to include enough healthy people to balance the number of ill ones and in so doing reduce the risk to the insurer. Larger groups thus present more of a risk.
If you have not been able to qualify for individual health insurance you might be able to obtain cover through the group policy of your employer or covered under federal or state government programs line Medicare, Medicaid, Blue Cross or an HMO.
Group policies may be preferable to individual health insurance since all employees are covered no matter their health status. It may also be cheaper and more flexible than individual cover.
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