Conversion Privilege
Conversion privilege is the right to transfer your existing group insurance coverage to an individual policy without providing medical evidence of insurability when your group coverage ends. This option allows you to maintain continuous protection during life transitions such as leaving a job, retiring, or losing eligibility under an employer-sponsored plan. It is a key feature that helps individuals avoid coverage gaps, especially if they have pre-existing medical conditions that could make new insurance difficult to obtain.
How It Works
Group insurance providers in Canada typically include a conversion privilege provision in life, accidental death and dismemberment, extended health and dental, and sometimes disability insurance policies. Because you were already approved as part of the group plan, the provision requires the insurer to allow you to switch to an individual policy upon termination from group coverage without submitting evidence of good health. These conversion health insurance plans are guaranteed issue, meaning there is no underwriting or medical questions and acceptance is guaranteed by the insurance company. The conversion privilege applies to several types of insurance, including health, dental, and life insurance. The employer is required to give each terminated employee notice of their options and timing to convert their coverage to an individual policy, and terminations that trigger this can include retirements as well as terminations with or without cause.
Example:
Suppose you retire in Manitoba and your employer's group health and dental benefits end. Under your insurer's conversion privilege, you can apply for a personal health and dental plan within 60 days, and your acceptance is guaranteed with no medical questionnaire even if you have a pre-existing condition. The individual conversion plan covers categories like prescription drugs, dental, and vision, though the annual benefit maximums are typically lower than what your group plan provided.
What to Watch For:
To exercise the conversion privilege you must apply within a specific time frame, usually between 30 and 90 days after your group coverage ends, and this window varies depending on the insurance provider. Keep in mind that the coverage amounts offered by individual conversion plans are usually less than those offered by employee benefit plans. With Manitoba Blue Cross's Blue Choice Conversion plan, you must apply within 60 days of the employer group coverage ending and approval is guaranteed with no medical questionnaire, regardless of which carrier provided your group plan.
