StreetWise Home  >  StreetWise Insurance Guide Home  >  Employer Provided Insurance versus Non-Employer Insurance

StreetWise Insurance Guide

Employer-Provided versus Non-Employer Insurance — Advantages and Disadvantages

Employer-Provided Insurance
Many employers, as part of employee benefit packages, offer insurance. Employer-provided insurance may include some, if not all, of the following: health, life, short-term disability, and long-term disability.
Advantages of employer-provided insurance:
  • The insurance plans are usually group plans.
  • Group plan premiums are usually lower than non-group plans, but you should shop around if possible.
  • The employer may pay some or all of the premium.
  • Premium payments are usually made by payroll deduction.
  • Applicants probably won't have to answer a health questionnaire or pass a health exam.
  • Pre-existing conditions may be covered possibly after a short waiting period.
Disadvantages of employer-provided insurance:
  • The plan choices may be limited.
  • The coverage may not be sufficient to meet your needs.
  • The employer may decide to drop coverage or the insurance company may cancel the policy.
  • Most employer coverage ends when you leave the company. When you can retain it, it's often at higher cost.
Group or Individual Insurance Bought Directly by the Individual
If you don't have access to employer-provided insurance, you will have to find your own coverage. If you are lucky, you may be able to qualify for group policies.
Advantages
  • You can maintain your protection even if you change employers.
  • You can compare plans and shop around for the best value.
  • You can choose a plan to fit your needs.
  • Price on life and long term care insurance could be less depending on your age, health, and other risk factors.
Disadvantages
  • Depending on the type of insurance, the selection of group or individual plans available may be limited.
  • You have to pay the full premium, usually in monthly or quarterly payments.
  • For life, health, and disability insurance, you will probably have to answer a health questionnaire and pass a health exam.
  • You can be refused coverage for pre-existing conditions.

To beginning of page
Investments are: NOT NCUSIF INSURED, NOT CREDIT UNION GUARANTEED, AND MAY LOSE VALUE. NOT A DEPOSIT. NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY.
Securities, Insurance, and Advisory services offered by Financial Network Investment Corporation, Member SIPC. Digital Federal Credit Union (DCU) and DCU Financial are not affiliated with Financial Network.

Property and casualty insurance provided by DCU Financial Insurance Services, LLC, a subsidiary of DCU. Business conducted with DCU Financial Insurance Services, LLC is separate and distinct from any business conducted with the credit union. Remember that any insurance required as a condition of the extension of credit by the credit union need not be purchased from DCU Financial Insurance Service but may, without affecting the approval of the application for credit, be purchased from an agent or insurance company of the member's choice. Insurance products are not deposits of Digital Federal Credit Union (DCU) and are not protected by the NCUA. They are not an obligation of or guaranteed by the credit union and may be subject to risk. Any questions or concerns regarding this relationship may be addressed to the Office of Consumer Affairs.

Digital Federal Credit Union
220 Donald Lynch Boulevard, PO Box 9130, Marlborough, MA 01752-9130 • 800.328.8797
©2006 Digital Federal Credit Union