What happens to your group insurance when you retire?

Group insurance 101

In most cases, group insurance is tied to your job or to a group (e.g., a union or professional association). You and your loved ones benefit from broader coverage than under the public prescription drug insurance plan (This hyperlink will open in a new tab), at a lower cost.

That lower cost comes down to two things: the risk is shared among all insured persons, and your employer or group contributes to the cost.

In other words, you share the cost of the premiums. The portion paid by the employer (or group) is generally more than 25% of the total cost and often up to 50%. Your employer then pays the premiums to the insurer and automatically deducts your share from your pay, and the same goes for your co-workers.

The Régie de l’assurance maladie du Québec (RAMQ) (This hyperlink will open in a new tab) requires group insurance plans to cover at least the same prescription drugs as the public plan. In many cases, group insurance also includes other types of coverage:

• Health care (healthcare professionals, hospitalization, medical supplies, etc.)
• Disability insurance
• Travel insurance
• Dental care
• Life insurance
• Critical illness insurance

Is your group insurance coverage ending?

Does the end of your group insurance coverage feel like stepping into the unknown? This concern is perfectly normal. Health and financial security often become even more important in retirement.

Rest assured, there is a solution to help make this transition easier. In insurance jargon, this is called the conversion privilege.

Convert your group insurance plan into individual coverage

In most cases, you can convert your group plan, which may include the following individual coverage:

• Healthcare professionals and other medical care
• Dental care
• Eye exams
• Medical supplies
• Travel insurance
• Life insurance

You choose the coverage that works best for you. And the best part? This option is available without a medical questionnaire or medical exam.

However, it is more expensive because you now have to pay the share your employer or group used to cover.

Converting your group plan to an individual plan lets you keep your coverage in retirement. You also benefit from favourable rates, even if your health has changed since then.

Getting new insurance can be harder if your health has changed, and it may cost more. With the conversion privilege, the process is simpler because no medical exam is required.

Five steps to transition from a group plan to individual coverage

1. Review your current contract

Ideally, do this before you retire. That way, you will not have to make a rushed decision and can fully enjoy this new stage of life.

You can do the following:

• Review the documents or contract for your plan, which set out the coverage provided and the applicable terms.
• Check your employer’s or union’s intranet or internal portal, where retirement-related information is often posted.
• Contact your human resources team, who can guide you and answer your questions.

2. Take the necessary steps at the right time

You must convert some of the coverage under your group plan to individual insurance within a specific time frame. In many cases, you need to do this in the weeks following your retirement.

You have up to 60 or 90 days for health insurance and 31 days for life insurance after you begin retirement. Other conditions may also apply, such as a maximum age for certain types of coverage.

3. Review all your options

When you retire, which coverage do you want to keep? Take the time to look at each option so you can choose the plan that suits you best. Think about the plans you have for retirement, such as travelling or even going back to work.

You also need to consider the impact on your retirement budget. The cost becomes a recurring personal expense. Look at it in light of your income and your ability to afford it over the long term.

Compare everything your insurer has to offer so you can make an informed decision.

4. Submit your application

Apply for the conversion privilege through your insurer.

Your insurer may ask you for documents or information to complete your application.

Make sure all the information is accurate and complete to avoid delays.

5. Review everything

Good news: your conversion application has been approved.

Review the details of your new individual insurance contract. Make sure it includes the coverage you chose.

Keep the contract in your records.

Is the conversion privilege right for you?

Converting your group insurance to individual coverage can be a good option in some situations, depending on your needs in retirement. It is not an automatic solution, but it is one worth considering.

Review your insurer’s offer carefully so you can choose coverage that matches your needs, your budget and your new reality in retirement.

You can also draw on your experience with your group plan to assess your insurer’s customer service and tools. Was it easy to file a claim or reach a representative?

Every situation is unique

You often need to make these decisions quickly. That is why it is essential to be well informed.

What matters most is looking at your real needs in retirement and comparing all the options available to you.

Explore the insurance options available to you in retirement.