If you have disability insurance and you are thinking of switching policies, there are several things you should be aware of.
Check all your options before switching policies to make sure that the policy you want really is better than the policy you currently have.
It is important that you do not cancel your existing disability insurance policy before you are sure that your new policy is active. If you cancel your current insurance policy without having a new policy, you will be temporarily uninsured. If you are uninsured and something happens to you that causes a disability, you will most likely have trouble getting the new company to give you benefits for your disability. The company could say that your disability is a preexisting condition and may not give you the disability benefits that you need or may not even let you sign up with one of their policies. It depends on the new company and new policy you want to sign up with, but this is a very likely scenario you could find yourself in if you drop your existing policy before adding a new policy.
Be sure to check with your current insurance to see if they will refund any premiums that you have already paid. Most insurance companies will not refund premiums you have paid, but there are some that may.
If you want to switch to a new policy offered by a different company, you can switch almost at any time you want. However, if you want to switch to a new policy that is offered within the same company you are currently with, you may be limited to switching policies once every twelve months or so.
If you switch policies within the same company, you will usually have coverage for all health problems if you have had your current policy for at least six months. Generally, you will not have to worry about the company denying coverage and benefits due to a preexisting condition or making you wait a certain period of time before benefits begin, which is likely to happen if you switch to a new policy with a new company. Note that you will not be allowed to keep more than one policy of the same type with the same company. If you are going to buy a new plan within the same company, you may need to sign a statement saying that you intend to cancel your old policy when you new policy is in effect and that you will not keep both policies.
If you switch to another policy with entire different company, particularly with an individual plan rather than a group plan, you may have to wait for specified periods of time in order to receive benefits of certain conditions, which is what the company will call a preexisting condition.
Switching plans may also cause your new premiums to raise and become more expensive if the new plan is based on your current age, rather than the age at which you first bought your insurance policy.
The newer long-term insurance policies often have better provisions than older policies. Newer policies usually do not require that you are in the hospital for a length of time before coverage will begin. Some older policies also require that you receive other levels of care, such as staying in nursing home for a period of time, before you will begin receiving benefits for your disability.
If you have a group policy, usually through your place of employment, and you are planning on leaving your job or severing ties with the place that you are currently employed, you will not be able to keep your policy. You will have to switch policies because group policies are usually never portable. If you have an individual insurance policy, it will stay with you even if you switch jobs.
When you do leave a group insurance policy, you are entitled to a Certificate of Credible Coverage from your former employer. This will show how many months you were covered under your old plan. You will be able to get credit toward any preexisting condition that you have and need covered in your new group plan. Often, if you were with your old company for more than a year, there won’t be a preexisting waiting period.