Individual Medical Insurance
For the person under age 65, benefit designs for individual medical plans are much like group medical plans. PPOs with office visit copayments and drug cards mirror what may be offered by an employer. High deductible plans are also available. When coupled with a tax-advantaged Health Savings Account (HSA), these low-cost plans can be very attractive.
Unlike group plans which may be composite rated, the rates for individual medical insurance are a function of the applicant's demographic and personal medical history. The underwriting process is much more thorough. In some cases, a paramedical exam is required.
Effective dates are subject to underwriting approval. The underwriting reply may encompass several scenarios. The best case would be an offer to issue coverage on a preferred or standard rate basis. At worst, coverage may be offered with a rate adjustment for medical history. If a rate adjustment exceeds a certain threshold, the application for coverage may be declined. An offer may also be extended with a rider(s) which excludes coverage for certain identified condition(s) for a specified period of time or indefinitely.
Exercise caution in replacing an individual medical policy. Be careful to completely receive and thoroughly review another carrier's offer for any rate adjustments and riders. Upon approval, forward written notice of termination to the prior carrier providing the name and date of the replacement carrier and the policy number of the new plan.
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