When most people sign on to a new benefits plan with their employer, few would question their life insurance policy.
Top concerns often relate to annual health concerns — whether you can get new glasses, chiropractor treatment, massage, etc… now, those concerns are totally fair. Getting a good crack or fresh style is a big perk, and one that you’ll be rewarded with each year to boot!
But the question of whether group health benefits are fulfilling your needs for life or disability insurance is rarely asked and often goes amiss.
Defining the Differences Between Group Health Insurance and Personal Health Insurance
There are a few key differences between a personal life or disability insurance plan versus what group health benefits bring you.
First, let’s get the definitions out of the way. Group health insurance is provided partially by your employer and partially by contributions you make monthly.
Group plans are limited in what they offer, but the big benefit for employees is that it reduces the cost of health treatments, pharmaceuticals, vision care, and such. Health insurance usually takes a backseat.
Personal health insurance is a plan that you create with a broker. It is a contract that you own and can only be canceled on your terms. The plan you create with your broker is designed to ensure that you are able to live your life the way you want to, no matter what obstacle comes your way.
While a personal life or disability insurance policy isn’t going to offer you a new set of specs on the regular, it is often the difference of whether or not you’ll be able to support yourself.
Here’s the breakdown:
- Group health benefits are not portable — if you leave your job, you are no longer covered
- Further, any premiums you’ve paid disappear
- Personal insurance plans are a fixed premium rate, whereas group health benefits typically increase annually
- Personal insurance plans are purchased at a set amount (which your broker works with you to determine), whereas group health insurance plans are typically a multiple (1x or 2x) your annual salary.
There’s quite a bit more to it than that, but these points show us the lapse in group health insurance policies: what happens when you’re unable to work and the money runs out?
That’s Where Individual Insurance Plans Come In
That’s Where Individual Insurance Plans Come In
You guessed it. And for good reason!
Take a minute to dust off your health benefits guide buried somewhere in your desk drawer. Now find the section on disability insurance or life insurance. It may horrify you to find that you’ve been gambling your future on the hope that a year’s salary will get you through a rough patch.
Don’t let it.
There’s a common misconception that by delaying your purchase of life insurance or disability insurance, you’re saving money — sorry to say, but that’s not the case.
The sooner you sign on, the lower the cost is. Rates are fixed on a few variables that we can work out through a consultation — give us a call to sort out those details.
You probably don’t check out every paystub you receive to find out how much your group health benefits are costing you. I mean, come on, no one is panicking over whether or not their health benefits coverage went up 0.6% this fiscal year. If you are, then you have probably already done the math to find out why personal insurance plans are in your best interest.
When it comes down to the brass tacks, group health benefits rarely, if ever, offer the coverage necessary to support you or your family if you’re injured or pass away. There’s no getting around that, and the cheapest time to purchase a personal, individual insurance plan that will cover you or your family was at its cheapest yesterday.
Really, personal insurance plans are a part of a healthy financial plan. We work with you to suss out what makes sense and what doesn’t — there’s no hidden fees or surprises down the road.