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What Is Personal Insurance?

Whenever you purchase an insurance policy, whether it is life insurance or some other type of insurance, you might think you are purchasing personal insurance. After all, you’re the one paying for the policy. That’s not what the term means though.

Some of us are covered by group insurance, the most common example being group health insurance which is often paid for, wholly or in part, by the insured persons’ employer. Some institutions offer group insurance rates to anyone who meets specific criteria. It’s not unusual for groups of people to band together to apply for group insurance, making each individual’s payments cheaper than it would be if they took out individual policies.

So, what then is personal insurance? Personal insurance is a group insurance policy that is made available to an individual, who may or may not be covered with the group. That is not the same as the insurance we usually purchase from an insurance company. What we are purchasing in this case is a private insurance policy. Private insurance and personal insurance are not one and the same. Why would we want personal insurance? It is often cheaper than a private insurance policy. In fact, a personal insurance policy, purchased from a group plan, is often less expensive than the standard group policy premiums.  

Health Is All Important – How is this possible? Your health has a great deal to do with it. If your health is far better than the health of the average person being covered by a group policy, the cost of your individual personal policy could be less. Insurance companies prefer to insure healthy people. In addition, in some places the law states that a group insurer must issue a personal policy to those who qualify.

Who would be most apt to purchase personal insurance? It would be someone who is already covered by the group insurance offered at their place of employment. A significant advantage in having a personal insurance policy is if you take a job with another company, are laid off, or fired, your group insurance policy will usually be terminated and you would be without insurance. If you have a personal insurance policy, the only way it can be terminated is if you stop making payments.

Job Insecurity Considerations – Personal insurance is a little-known type of insurance, but it is rapidly becoming more and more popular. In a turbulent market, where job security is sometimes uncertain, having such a policy is a nice alternative to being caught without insurance should you lose your job. This type of insurance may or may not be for you, and it may not be available everywhere, but it is certainly worth looking into.

Whether you are considering personal insurance or some other type, feel free to contact us for information, advice, and quotes. We are here to help, and our quotes are free.