There has been some national press coverage in recent weeks around group-leaver plans and whether insurers are fleecing customers who take out personal cover upon leaving group schemes, writes Regency Health's Brian Walters.
The key point underlying this issue is that there is no contractual relationship between group beneficiaries and their insurer - the contract is with the employer. Despite being under no obligation, insurers will nearly always offer continuation terms to group leavers, but at a premium that the insurer considers commensurate with the risk. This can sometimes be several times the cost of the group cover, and it is this that has raised the ire of some commentators. The risk presented by group leavers is of course pooled, but that risk still needs to be underwritten. Underwriting i...
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