It takes most college graduates six months to a year to land a job. Meanwhile, health-insurance coverage they had in college or under their parents' plans usually dries up shortly after they graduate. If you're crossing your fingers, counting on your son or daughter not to get injured or ill before gaining employment--and medical insurance--you might want to take decisive action.
Health-insurance providers have designed short-term policies to act as a bridge for college grads who are no longer considered dependents of their parents, or people between jobs who hope to regain full benefits soon. For as little as $30 a month, with a high deductible, you can purchase coverage for major medical expenses. The plans, which usually last a maximum of six months, don't cover preexisting conditions. That means no physical or waiting period is required.
There are a few provisions you should check besides price when comparing policies. For example, some companies exclude expenses that are incurred outside the U.S. Also, most companies require that you pay in full up front and won't refund any unused portion. Many will not write a second short-term policy. If you don't know how long your child will need coverage, look for plans that will let you take out another policy after the first one expires (such as Time Insurance) or that will send you a monthly bill so you can pay as you go (John Alden Life Insurance).
CONVERSIONS. A key difference between policies is how long benefits will be extended for an ongoing claim. Many will continue coverage for a year, but only for someone fully disabled (confined to a bed). Golden Rule Insurance extends benefits for two full years, whether or not the insured is disabled, and also offers refunds.
If your child has a preexisting condition, major medical is inadequate. But the federal government requires companies to extend coverage for former dependents up to 36 months as long as you pay the full premium (as much as $150 to $300 a month). Another expensive possibility: Some employers offer conversion options that allow children of employees to convert to an individual policy when they are no longer eligible for the family plan.
If it looks as if your child's job search will extend a year or more, consider outfitting him or her with an individual comprehensive medical plan. But if your offspring is healthy and job prospects look good, short-term major medical can provide some inexpensive peace of mind until the graduate starts bringing home the bacon.
FILLING AN INSURANCE GAP Policy Monthly Coverage premium* Millions GOLDEN RULE $27.42 $1 (317 297-4123) JOHN ALDEN 33.20 1 (800 448-1433) TIME 33.60 2 (800 743-8463 x8335) TRUSTMARK 45.77 2 (800 347-0889) *For a 24-year-old male from Columbus, Ohio, with a $500 deductible. Prices vary between cities and are slightly higher for women. DATA: COMPANIY REPORTS