Group insurance vs personal insurance What's are the pros and cons

Hi Anon,

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There are various considerations to each type and generally group insurance serves as a good complement to personal insurance. You can catch watch https://www.youtube.com/watch?v=oZvGpePXvHE where I discussed some of the salient points of using group insurance in our financial planning :)

Hi anon,

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In general

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Group insurance:

• Cheaper as the group to be insured is larger and the insurer can factor that in when pricing.
• You do not own the policy and if you are no longer a member of the group, you will immediately lose the benefits
• Price can change any time when the yearly renewal of the group policy occurs. Terms may change as well (e.g. MINDEF group insurance moved everyone to 209 CI definitions for all renewals since Aug 2020, even if you wanted to stay on the 2014 definitions)
• You may be able to extend the coverage at the same rate to your loved ones at the reduced rate
• Not able to make a nomination

Peronal Insurance

• Higher premiums as they have to underwrite based on an individual
• You own the policy so the policy stays with you no matter what stage of life you are in
• Price is locked in for most cases (except hospitalization/CI riders) and will stay level. Terms and conditions locked in at point of purchase (except hospitalization which can change)
• To protect your loved ones you have to underwrite based on their profile
• Able to make a nomination

I'd take a mixture of both for my protection needs. Group insurance can be cost effective but I will always have a backup plan with my personal policies.