Question

What are the primary advantages and disadvantages to employment-based insurance as a primary means of coverage?

Answer 1

Primary Advantages of Employment-based insurance

1. As it is a group insurance it has less premiums.

2. For people with earlier medical conditions difficult to find policy of their choice or may be costly if purchase individually. But as it group insurance it will reduce premium amounts.

3. Process becomes very easy. You need to get in touch with HR who will do rest of work for you.

4. As it is directly deducted from salaries, premiums will get paid without failure.

5. It will help maximum no of people gets covered in insurance.

Disadvantages

1. Cover is insufficient even if you are eligible for more if purchased independently.

2. Insurance will be lost if for some or other reason there is loss of job.

3. Every employee falls under different tax bracket which depends on salary person gets. As this insurance cover is planned by employer there is possibility that unequal tax implications may arise.

4. You may have buy additional policy as per requirement, so managing multiple policies becomes tedious task for management and tax point of view.