Group Insurance Is Temporary

Group insurance is typically taken up by employer to provide insurance coverage as a fringe benefit for their employees. Almost all group insurance are yearly renewable policy. The insurance scheme normally covers the employee's life, disability, accident, medical and some retirement scheme. Spouse and family may be included in group medical scheme.Employer prefer group insurance as this is the most economical type of insurance.

Employee insured under the Employer group insurance policy must not forget that group insurance is a temporary insurance coverage.

Many employees are under the illusion that group insurance is permanent. They refused to purchase individual permanent insurance under the assumption that they are insured permanently. For example - a healthy man joins the workforce at age 25. He is covered under group insurance. He did not purchase any individual permanent life or medical insurance on his own.

At a later stage of his life - his group insurance cease due to the employer not renewing the group insurance policy or the employeee left the employer. When the employee apply for a permanent individual insurance policy - his health may have change. This may prevent him from obtaining the insurance policy or counter-offer from insurer. The counter offer can be a loading in premium and/or exclusion on the illness and/or limitation of the extend of the coverage.

In another scenario where employee looses out is when employer switch group insurer. Because an employee health may have changed, the new insurer may decline his application of insurance or a counter-offer.

Or when employee are asked to leave employment due to cronic / terminal illnesses. This employee will never be insurable again.

Most retirees are unable to obtain individual insurance coverage after retirement from employment because of their health status have changed. Most Malaysian would have been daignosed for diabetes, high blood pressure, gouts, high cholesterol at age 55 and above. For those retirees who are luckier to obtain individual insurance - it comes with a high premium, exclusions and limitations.

Young employee are strongly advice not to reply on group insurance exclusively. Group insurance provides TEMPORARY protection only. When you are older and need insurance - you will discover that you are no longer insurable.

"Good things are not cheap and cheap things are not good.