When it comes to health insurance, there is strength in numbers. The bigger the group, the more the risk is spread. All the people come together based on the accident of where they work. Some will have good health, others bad. Some will be lucky and avoid accidents, other will be unlucky. The rate is decided by the average usage by the group. The good and bad evens out, protecting you from rate increases. When you are on your own, making a claim can result in an immediate premium increase the next time your policy comes up for renewal. The evidence shows that many people who carry their own insurance do not make many small claims. They prefer to keep their own premiums low against the risk of bigger bills in the future.

Another critical difference lies in the waiting periods applied. When you take out any insurance policy, the question of whether you have a pre-existing condition becomes important. Because the demographics of the group spread the risk, group insurers tend to have shorter waiting periods. Thus, so long as your health remains good for six months, you can then treat any illness as “new”. But some private health insurance policies treat any illness as potentially pre-existing for up to two years. Make sure you check the terms of the policy before you buy.