How switching medical insurance policy affects your new cover

You don’t have to stick with the same medical insurer year after year. In fact shopping around from time to time for the best deal could save you money, and allow you to increase your benefits. If you’re on a company policy then you’ll need to change schemes when your employment terminates or you retire, so it’s important to know the implications of changing your policy and what it means for your underwriting.

Why change insurers?

  • You want to alter what your insurance covers. There are numerous benefits you can add or take off your policy. What suited your needs 5 years ago may not do now, so it’s worth re-evaluating your needs to see if your medical insurance provides adequately for them.

  • You’ve retired or left a company scheme but still want the benefits of private medical insurance.

  • You want a cheaper premium. By shopping around you can often get a better deal. You wouldn’t think about staying with your car insurance provider if you could get the same for less elsewhere, so why should you treat your medical insurance any differently?

  • You were a dependent on a policy and reached the age of 21 (or 24 if you’re in further education) so now need your own individual policy.

  • Your family circumstances have changed e.g due to marriage, divorce or being widowed. You may want to be removed from a family policy to be placed on an existing one, or added to your new partners existing family cover.

What does transferring from your existing policy mean for your underwriting?

Rather than taking out a brand new policy, there are considerable benefits to be found from continuing cover from your previous policy with a new insurer. The reason for this vary depending on the kind of underwriting you have on your current policy, so lets take a look.

  • Moratorium – If have a moratorium policy then you’ll understand the importance of the effective date (when the policy was taken out) in determining which conditions and symptoms you’re covered for. With a moratorium any conditions or symptoms you suffered 5 years before taking out the policy are excluded. In order to apply for cover you’ll need to go for a 2 year period from the effective date of the policy without any advice, treatment or medication.

    If you took your policy out on the 1st January 2005 then this will be your effective date, so it makes sense to maintain this date on your new policy. This will mean any medical problems you started with over the course of your current policy will also be covered on your new one.

  • Fully medically underwritten – If you have a medically underwritten policy then you may have existing exclusions. These exclusions can be carried on with your new insurer under a form of underwriting known as continued medical exclusions. This means you don’t have to go through the time consuming process of filling in a new medical declaration, and no new exclusions can be added to your policy. If you’ve recently started suffering from new medical problems this is particularly beneficial, as it means you will still be able to continue to claim for these on your new policy.

  • Medical history disregarded – This type of underwriting can only be accessed through company schemes or from birth, normally you can’t buy it as an individual. However if you’re changing providers and already have this type of underwriting then you can choose to continue the cover on your new policy. This is particularly useful if you’ve left a company scheme where you had medical history disregarded underwriting and want to continue your insurance with an individual scheme. However, the cost of medical history disregarded underwriting on your policy will be high, so it’s well worth considering if you really need it. This is primarily a matter of common sense – the more medical problems you have suffered from in the past, the more sense it makes to continue with medical history disregarded underwriting.

Things to consider when switching insurance

  • Make sure you don’t suffer any financial penalties from leaving your existing insurer. The time to switch policies is at the end of your policy year, not during it. Make sure you have everything in place by this time so you can switch without a break in your cover.

  • Re-assess your needs to ensure they are met by your new policy. Circumstances change and you can adapt your new policy to reflect this.

  • Ongoing conditions and treatment should be covered by your new insurer. Give them a call in advance to make them aware of your existing claim. They will need to set up a new claim on their system and give you a new authorisation number. This will help prevent any administrative mix ups which could mean your hospital or specialist bills don’t get paid.

At the end of the day you should treat your medical insurance the same as any other insurance policy, such as those for your home or car. Shop around each year to ensure you’re getting the policy you need for the lowest price.

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