Sometimes you have a choice between individually owned coverage and group coverage through your employer (such as where to insure your dependent children). Here’s a brief comparison of advantages and disadvantages of both types of plans to help you make a good choice.

Pricing

Group health insurance policies are usually less expensive. Plus, the employer usually pays part of the group insurance bill. And whatever portion of the costs the employee has to pay is usually set up by the employer to be directly deducted from payroll using pretax dollars.

Underwriting

Group coverage wins again. When most people apply for group coverage, they’re guaranteed to be accepted, no matter how poor their health. They could have diabetes, heart disease, or even terminal cancer. The only eligibility requirement is that they be employed. Sometimes, depending on the length of prior coverage, there may be a waiting period of up to a year for preexisting conditions, especially if the applicant had no insurance at the time he or she was hired.

Individual coverage, on the other hand, is strictly underwritten. (Underwriting is the process of reviewing an application to determine whether the applicant is acceptable for coverage.) Medical questions are part of the application. Your past medical records are often checked. The insurance company can do one of four things with your application: It can flat out turn you down. It can issue you a policy with no restrictions at preferred rates. It can issue you a policy with an extra charge for your condition. Or it can completely exclude coverage for a condition.