Continuation Option
The continuation option allows an insured person to convert a group insurance policy into an individual policy without a new health assessment upon leaving the group.
Concept
The continuation option is a contractual right that gives an insured person, upon leaving a group insurance scheme — for example due to a change of employer or termination of employment — the ability to convert existing coverage into an individual policy without a new health assessment.
Relevance for the Insured
Without a continuation option, an insured person would lose coverage upon leaving the group and would have to undergo a new health assessment for a new policy, which could lead to rejection or significant premium loadings, particularly if health impairments have arisen in the meantime; the continuation option therefore protects against loss of coverage in the event of illness.
Structure and Time Limits
The continuation option must usually be exercised within a limited period, typically within a set window (such as 30 to 90 days) after termination of group membership, and may come with restrictions on the scope of benefits or the premium amount compared to the original group policy.