What Is a Conversion Medical Insurance Policy?

Take great care not to let your health insurance coverage lapse.

Take great care not to let your health insurance coverage lapse.

If you or your spouse lose your job, your group medical insurance policy provided by your employer goes with it. The good news, however, is that you'll likely be offered several options for individual health coverage to take its place -- including a conversion medical insurance policy. Since conversion coverage is likely to cost more and time limits apply, you'll want to examine your options carefully to secure the most coverage for the longest term.


A conversion, or continuation, medical insurance policy is offered to individuals after their group health insurance policy ends due to a qualifying event, such as employment termination or divorce. The conversion policy is offered by the former group policy provider and responsibility for the cost rests solely on the individual. Although they provide similar functions, a conversion policy is not the same thing as COBRA -- temporary continuation coverage from the same group provider -- that typically only lasts 18 months except when disability could extend it further. A conversion policy is ongoing and provided directly through the group provider.

Conditions for Conversion

A conversion policy may be offered by the group insurer when group health insurance ends due to many types of qualifying events, such as if your employer decides it will no longer pay for group insurance. Whether a conversion policy must be offered by law to individuals when a group policy ends depends on the state in which you live Time limits are involved, so if you don't sign the paperwork within the required time frame, you could lose the chance to obtain the coverage. For example, Kentucky law allows 31 days for an individual to apply for coverage and pay the premium from the time the written notice of the conversion option is mailed or delivered. Minimum time frames that the individual must have been covered with group insurance may also apply -- for example, three months in Kentucky.


A conversion policy typically is more expensive than a group medical insurance policy. However, some states might place limits on how much can be charged for a conversion policy. To find out your own state's laws, contact the insurance commissioner's office. COBRA might cost less than the individual conversion policy and have more benefits coverage, but remember that COBRA is only temporary coverage.

Pros and Cons

A conversion policy ensures that you have some type of medical coverage after losing group coverage -- which is extremely important if you're ever faced with a catastrophic illness. It also doesn't exclude pre-existing conditions for certain periods of time. But, according to the American Diabetes Association, in addition to the higher cost, a conversion medical insurance policy usually does not offer as many benefits as the initial group medical insurance policy. However, some states require a certain tier of minimum benefits to be offered under the conversion policy -- which may or may not include the majority of benefits from the group plan.


About the Author

Anna Windermere started her writing and editing career in 1993, upon graduating from the University of Florida's esteemed journalism school with a bachelor's in journalism. Ms. Windermere, a senior-level copy editor, has appeared in mastheads of newspapers and magazines as copy chief, writer and proofreader, including "Sun-Sentinel," "Miami Herald," "City Link," "New Times," "NewBeauty," "Luxe," "Florida Alligator," "Orange & Blue," and more.

Photo Credits

  • Wendy Hope/Stockbyte/Getty Images