The most popular company benefit these days is group insurance, which many people receive along with their employment contract without paying a premium themselves. And because it comes free, many never read what it actually covers — and miss the important points that need further planning. Let's go through it.

What group insurance is

It is a policy the employer takes out for the whole organisation under a single contract. The cover commonly includes outpatient and inpatient medical expenses, life insurance, and accident cover, with limits usually varying by grade or by conditions the organisation sets. Its main advantages are that individual medical underwriting is usually not required, and cover begins as soon as employment starts, under the terms of the contract.

The strengths, worth using fully

Group insurance is very well suited to ordinary illness during the year: outpatient consultations up to the per-visit limit, dental benefits where entitled, and hospital admission with a basic limit. If you have never read your own benefit schedule, ask HR for it and make full use of what you have.

The limits to be aware of

  • The cover is tied to the job. Resign, retire or be laid off and the cover ends under the terms. A change of job can leave a window with no cover at all.
  • The limits may not be enough for a serious illness. Many group schemes are designed for ordinary illness; treatment for a critical illness or a long hospital stay can exceed the limits.
  • The conditions can change. An organisation may revise the plan or change insurer at each contract renewal, so next year's cover may not be this year's.
  • It doesn't follow you as you age. At retirement — the stage of life when cover is needed most — is precisely when group insurance disappears, and starting a personal policy at that point means both a high premium and possible health conditions attached.

Some group policies can be converted to personal ones

Some group schemes allow an employee who leaves to convert the cover into a personal policy within a set period, in some cases without a new health declaration, subject to conditions. If you are about to leave a job and are concerned about your health, ask HR or the insurer about this before your last day. It can be a very valuable option.

Making group and personal cover work together

The idea is to use group insurance as the first layer for illness during the year, and to have a personal policy as the second layer that stays with you whatever happens to the job. A popular technique is to choose a personal plan with a deductible and let the group scheme pay that first portion — the premium drops considerably while the combined cover remains complete.

In short

Group insurance is a good benefit, but it is cover that is borrowed for the length of your employment. Know your limits, use what you have, and build a layer of personal cover that is genuinely yours alongside it. Then however many times your career path changes, your health always has someone looking after it.