Guaranteed Issue Health Insurance vs Underwritten Plans

By Krista DeKuyper | October 12, 2023 | Employee Benefits, Health Insurance

Personal Canadian health insurance plans can be classified into two main types: guaranteed issue health insurance vs underwritten plans.

But what exactly are “personal” health insurance plans, and how do these two main types of plans differ?

Read on to find out the answers to these questions as we share with you our experience and knowledge as Canadian insurance brokers.

Personal Health Insurance vs Employee Benefits

Private Canadian health insurance comes in one of two forms: employee benefits and personal health insurance.*

Employee benefits, also referred to as “group insurance” or “group health insurance”, are only offered through an employer. They do not require answering medical questions. And, benefits are the same for all employees (note that there may be classifications. Which means different types of employees get different benefits and coverage amounts).

Employee benefits typically offer extensive amounts of coverage, with the employer paying anywhere from 50% to 100% of the premiums.

If a person’s employment ends then the employee benefits for that person are terminated.

Personal health insurance, also called “individual health insurance” or “family health insurance”, is not related in any way to employment. Rather, it is available to either individuals, couples or families.

These personal health plans typically do not offer as much coverage when compared to employee benefit plans. On the other hand, they cannot be terminated for any reason by the insurance company, and benefits are available as long as the premiums are paid.

What is Underwriting?

The term “underwriting” refers to the process by which an insurance company rates the health and lifestyle of a health insurance applicant.

This involves the applicant’s answering of various medical questions as well as the applicant granting the insurance company permission to access their medical records.

Medical records consist of any and all records recorded by a personal physician, a medical clinic and visits to a hospital.

Note that this underwriting process also applies to medically underwritten life insurance plans.

Guaranteed Issue Health Plans

Guaranteed health insurance plans, unlike medically underwritten personal health plans, never involve the answering of medical questions. Acceptance is guaranteed, regardless of a person’s current or previous health.

Sounds good so far, doesn’t it? The questions arises, however: how can insurance companies offer these plans on a guaranteed basis? The answer is two-fold as follows:  

  1. The amount of coverage offered by guaranteed plans is less than medically underwritten plans (especially true for prescription drug coverage).
  2. The insurance companies have access to a massive amount of data that they analyze. They look at things like age and gender, and then predict the likelihood of health complications. Premiums for guaranteed plans reflect these statistics.

In addition some guaranteed issue plans group all insured people together, similar to an employee benefits plan. This means that when it comes time to renew the premiums (the cost goes up according to one’s age) the costs go up for all insured people, instead of being increased on the basis of how many claims the insured person made in the previous year.

Guaranteed Issue or Medically Underwritten Plan?

If you are thinking about getting an individual health insurance plan then you have two options: a guaranteed issue plan that will automatically cover pre-existing conditions, or a medically underwritten plan.

If you are in good health and do not have any pre-existing conditions (i.e. health conditions that existed prior to applying for coverage) then the best option is an underwritten plan. Coverage amounts are higher, especially coverage for prescription drugs.

If you have one or more serious medical conditions and want coverage for those conditions (and any associated medications) then the only option is a guaranteed issue plan.

If you have a pre-existing condition but do not care about coverage for that condition you can apply for a medically underwritten plan, in which case coverage for that condition will be excluded.

Specific Guaranteed Issue Health Plans

Here at we offer two different types of guaranteed issue health insurance plans: Flexcare ComboPlus (Basic) and FollowMe health plans.

The Flexcare ComboPlus Basic plan is one type of plan under the Flexcare umbrella (there are also DentalPlus and DrugPlus plans, click here for more).

The FollowMe health plans are “conversion” plans, and are specifically designed for people who have lost their employee benefits. To qualify for a FollowMe plan you must apply within 60 days of losing your group insurance benefits. FollowMe plans can be either the Basic, Enhanced, Enhanced Plus or Premiere plan. For details click here.


We hope you found this article about Guaranteed Issue Health Insurance vs Underwritten Plans helpful.

If you have any questions please contact us toll-free at 1-800-474-4474. As health insurance brokers it is our mission to get you the plan that best suits your particular situation!

* We are discussing private health insurance, which is offered by an insurance company and paid for via “premiums”. Do not confuse these plans with provincial healthcare plans such as OHIP (Ontario) and AHCIP (Alberta), which are automatically offered to a resident of a province (or territory for that matter) and are paid for via taxes.