Which policy type usually has higher premiums and lower benefits?

Individual policies typically have higher premiums and lower benefits compared to other policy types. This is primarily due to the nature of how individual policies are underwritten and the risk assessment associated with them. When purchasing an individual policy, the insurer takes on more risk as it covers a single person rather than a larger pool of people.

Individual policies are often customized to the specific needs of the individual, which can lead to higher costs. Insurers may also charge more because they have less predictability in risk, as individual applicants vary widely in health status, age, and medical history. As such, premiums are set higher to account for the potential expenses that might arise from insuring individuals who may have chronic conditions or higher healthcare needs.

In contrast, group policies and employer-sponsored plans usually have lower premiums and higher benefits because the risk is spread out across a large group of individuals, resulting in more stable expenses for the insurer. Managed care plans may also negotiate lower costs due to their structured networks and payment models, again leading to different premium structures than individual policies.