Health Insurance California >> Long Term Care >> Individual vs. Group Long Term Insurance

Individual vs. Group Long Term Insurance

An individual long term insurance policy is a contract between you and the insurer. These insurance policies should be approved by the California Department of Insurance (CDI) and should have the entire consumer protections required under California law. Individual Long term insurance policies are “guaranteed renewable” and cannot be canceled by the insurance company unless the premium is not paid by you on time. However, every company carries the right to increase the premiums it charges with proper notification and approval from the Department of Insurance.

Group long term insurance policy is a contract between an insurer and a group of people, such as an employer on behalf of its employees, or a trade or professional association on behalf of its members. If you are covered under a group insurance plan, you receive a “certificate” rather than a “policy” of insurance. Also, many of the insurance policy terms have already been negotiated by the group of people, and the group (called the “master policy holder”) also has the option to terminate the insurance policy at any time. Often, but not always, group insurance plan is less expensive than individual insurance plan. If group insurance plan is terminated, you have the right to continue the insurance coverage or purchase a conversion policy, depending on the provisions of the insurance policy and other factors. If you purchase group insurance coverage, ask about what options would be available to you if your group cancels the insurance policy or if you lose your membership or eligibility. Be sure to ask if the premiums would change, and ask how you would be notified.

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