Portability When You Leave The Employer Who Insured You

Group disability cover is tied to employment, and it usually ends when the job does. What can be carried out of the plan depends on options that must be exercised within days rather than months.

Why group cover ends with the job

The employer holds the master contract and the employee holds a certificate of coverage, so the individual has no contract with the insurer independent of the group.

Cover typically terminates at the end of the month in which employment ends, and continuation of health coverage does not extend disability cover.

A disability that begins after termination is therefore uncovered even where the underlying condition existed while employed.

Conversion and portability options

Some group contracts allow conversion to an individual policy without medical evidence, and some offer portability, continuing group cover on a direct-billed basis.

Both require election within a short window after termination, commonly measured in weeks, and the window is not usually reopened for people who were unaware of it.

Coverage obtained this way is often narrower than the group benefit, with lower amounts, shorter benefit periods and less favourable definitions of disability.

The value of an individually owned policy

A policy bought personally is not tied to an employer, so it survives job changes, career shifts and periods of self-employment without any election being required.

It is also underwritten once, at the age and health of purchase, and remains in force on those terms provided premiums are paid.

The premium is higher than a group contribution because it is individually underwritten and not subsidised, and because the definitions are generally broader.

Timing around a job change

The safe sequence is to secure individual cover while still employed and in good health, since underwriting depends on both.

Income documentation is also easier while employed, and disability underwriting limits benefit amounts against demonstrated earnings.

New employment usually brings a waiting period before group cover begins, and pre-existing condition clauses then apply from that later effective date.

Claims that straddle the change

Where a disability begins while covered but is not reported until after termination, entitlement generally depends on the date of disability rather than the date of notice.

Contracts nevertheless impose notice and proof deadlines, and a late claim can fail on those grounds even though the disability arose while cover was in force.

Conversion rights, portability terms, election windows and notice deadlines vary between contracts and jurisdictions and change over time, so the plan documents govern.