What is a notable disadvantage associated with Group Insurance?

The notable disadvantage associated with group insurance is that coverage can become costly if you leave the group. Under group insurance plans, coverage is often tied to employment or membership in a specific organization. When an individual leaves the group, they frequently lose their insurance coverage and may find it necessary to secure an individual policy, which can lead to higher premiums and potentially reduced benefits. This scenario can create a financial burden for individuals who may face difficulties in obtaining affordable health or life insurance on their own once their group coverage ends.

Unlike group insurance, which typically offers lower rates due to risk pooling, individual policies do not benefit from that same pooling effect, making them more expensive. Although group plans may sometimes offer less comprehensive coverage, this is not the primary disadvantage when considering the impact of losing coverage upon leaving the group, which often results in a significant and immediate concern for those affected. Group insurance is not restricted to small businesses; it can hold for organizations of various sizes, including larger corporations, associations, and unions.