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Business Health Insurance, is a fantastic company benefit, helping employees access faster medical care in private facilities. In most cases, their insurance ceases when they leave, retire, or are made redundant, meaning they have to find their own personal insurance plan if they want to remain covered. In this guide, we’ll explain Health Insurance continuation schemes, and explore your options for transferring a company Health Insurance policy to a personal one.
When it comes to leaving a company health scheme, some insurers offer what’s known as a “continuation option,” allowing you to change your group policy to personal cover without having to go through a new underwriting process.
Many larger companies have medical history disregarded (MHD) Health Insurance, which means there’s no individual underwriting and that scheme members enjoy complete coverage. This is a popular choice of Health Insurance underwriting, but it’s only available for group schemes of a certain size.
Individuals can only have this cover if they’ve been part of an MHD scheme already and are going forward with a continuing policy on those terms. However, if you are looking for a continuation scheme on an individual basis, the cost of private medical insurance with the MHD underwriting maintained will usually be very expensive.
As an individual, the cost of Private Medical Insurance written on an MHD honoured basis is likely to be around double the premiums the company was paying; far more than most of us can afford.
Nadeem Farid
Head of Employee Benefits at Drewberry
When it comes to Directors Health Insurance, a business may choose to pay for the outgoing director’s continuation scheme. This can be an arrangement of 12 months (sometimes more) depending on the nature of the policy and the company involved. This approach often extends to companies that employ a partnership structure; we often deal with senior accountants and lawyers who were partners in their firms before they left.
For most people (i.e. non-directors or partners), the only affordable alternative is to take out a new individual Health Insurance policy on a new underwriting basis.
Choosing full medical underwriting (FMU) means you’ll need to submit a health declaration to your new insurer, and you often won’t get cover for conditions for which you’ve previously received treatment.
However, if you’re generally in good health and can safely say you haven’t suffered any medical conditions over the previous five years, you can choose to take out cover on a “new moratorium” basis, which means you won’t need a health declaration.
Even so, if you have pre-existing conditions, you’ll still need to complete a two-year period from when the policy starts where you don’t receive any medical advice or treatment for that condition before you’ll be eligible to claim for that particular condition.
To continue any form of underwriting from your group scheme (at least initially) it’s advisable to stay with the same insurer when you leave your employer.
The time limit isn’t such a problem for those who might be retiring or working their notice, but for those who are made redundant it can be a major headache. They tend to get relatively little notice before finding themselves out of work and with no Private Medical Insurance.
This means they have some tough choices to make. Not least because the cost of Private Medical Insurance will probably go up due to them having to pay two months’ premiums at the outset as they’ll need to pay the back premiums even if the policy wasn’t used. Remember: when seeking a continuation policy, there can’t be any break in cover.
As an independent Health Insurance broker, we’re on hand to help you make an informed decision when moving your comapny Private Medical Cover to a personal policy. We live and breathe insurance, and have helped thousands of people to protect their most important asset: their health.
Our advice is totally fee-free, so you won’t pay us a penny when setting up your policy. Call 02074425880, email help@drewberry.co.uk, or compare quotes to get started.
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