Group Insurance Sucks Life

Group Insurance or Employer provided group insurance is a temporary insurance.

Temporary
Employer provided group life insurance is an excellent benefit, but its major drawback is that when you leave your employer for another opportunity, you leave this benefit behind.  Your new employer may or may not provide the same level of benefit or perhaps none at all. Or your health has changed and you are not eligible to participate in the group insurance of your new employer


Not Automatically Renew
Group insurance is a yearly renewal insurance. It is not a guaranteed renewal - ie - insurer has the right not to renew the policy. If the employer incurred poor claim experience or undergoing more risky operation (occupational classification) - an insurer will prefer not to renew the policy.




Increase Premium Rate
Insurer has the right to increase premium rate upon policy renewal. Increasing the premium rate may
 force the employer to:-
1: Lapse the policy (refuse to renew the group insurance policy)
2: and / or reduce group insurance coverage/benefits for its employees




Conditional Renewal
Insurer may impose new condition(s) upon policy renewal.




Case Study
An employee suffers from critial illness ie cancer and made claims from her employer group hospital & surgical insurance. When the policy is due for renewal - the insurer will avoid insuring this cancer stricken employee due to the future claims on medical treatment plus additional payout in the event of the employee's death or disability.




It is normal for Malaysian insurers to impose new conditions before renewal ie
1: Exclude the employee (suffering from cancer) from the group insurance
2: Limit the amount of claim the employee may be entitled
3: Increase premium to the extend the employer is unable to insure the employee




Get a Permanent Life
Your need for the life insurance does not go away just because you changed or lost a job, so it is important you have personally owned life insurance that stays with you when you make these changes.  Your financial obligations don’t change, only your job.”