Money tip #116 – The medical insurance concession often overlooked when changing jobs

2 min Read Published: 08 Dec 2010

 If you are about to leave a job that provides medical insurance for one that does not  it's important that you arrange replacement cover before you depart in order to take advantage of a little known concession.

The concession is that it may be possible to continue the policy that you already have in place, as part of your existing employer's group medical scheme, on an individual basis once you leave your job.

While admittedly the monthly premium will rise, as you will no longer benefit from the group discount applied to your company's scheme, perhaps most importantly you can maintain the level and type of cover you have enjoyed to date without the need for underwriting. Underwriting is the process whereby an insurer assesses an insurance application. This usually involves the insurance company contacting the applicant's GP to discuss their medical history and possibly putting the applicant through a series of medical tests.

If you were to leave the firm and then subsequently look into taking out replacement cover any new contract will unlikely cover any existing medical conditions you may have, or at least not for a period of time known as the 'moratorium period' (often 2 years). However, if you obtain a quote from the insurance company that provides your soon to be ex-employer's scheme they will usually provide an individual policy on the same basis, without underwriting, which covers existing medical conditions -but only if there is no break in cover from the date of leaving the employer’s scheme to the date of taking out a new individual policy.

(Image: renjith krishnan /
  1. I wouldn’t say that it was a little-known concession – most insurers and brokers actively market continuation options to group leavers.

    It is absolutely not the case that an insurer will allow a group leaver to continue the policy that they already have in place. Underwriting terms, yes, but the policies themselves are completely different contracts and may have very different benefits.

    Group-leaver continuation policies can be invaluable to clients who would otherwise lose cover for their pre-existing conditions, but they tend to be very expensive. Some insurers will take a ‘switch’ from a group to individual scheme, such that a group leaver may be able to carry forward their underwriting terms to a new insurer and benefit from more reasonable premiums.

    The ‘moratorium period’, already a common cause of confusion among consumers, is dangerously under-described in the article. See here for a more thorough explanation:

    moratorium period

    1. Brian

      Thanks for the comment

      The point of the article and the site is to educate the general public. You and I (industry professionals) will be well aware of the points and many more.

      Unfortunately the masses (to which this article is aimed) through no fault of their own are often left to their own devices – not having access to well informed advisers or brokers (or certainly unable to afford them). To illustrate the point this article was based on a reader’s experience whereby they had lost cover because neither the employer, insurer or broker informed them of their options.

      You are right it’s not the case that a leaver can continue their policy when they leave – as you say underwriting terms yes. I felt that is clear from the article, but if not then thanks for drawing the point out.

      I always publish comments in full and can not vouch for a 3rd party link. As ever, I would remind readers to be mindful of impartiality when visiting any blog or site associated with a company that sells products being discussed.

      Keep in touch and it’s good to see other industry professionals sharing their knowledge.


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