Florida 2-15 Life, Health and Variable Annuity AgentGeneral Knowledge of Life InsuranceEasy
A client is 65 years old and wants to convert their employer-sponsored group life insurance policy to an individual policy after retiring. They are concerned about their health and ability to pass a medical exam. Which feature of group life insurance allows them to do this?
- AContributory Plan Provision
- BIncontestability Clause
- CConversion Privilege
- DAssignment Clause
Show answer & explanationAnswer & explanation
Correct answer: C. Conversion Privilege
The Conversion Privilege in group life insurance allows an employee to convert their group coverage to an individual policy, usually a whole life policy, without providing evidence of insurability.
Why the other options are wrong
- A. A Contributory Plan Provision refers to whether employees contribute to premium payments, not conversion rights.
- B. The Incontestability Clause prevents the insurer from denying claims after a certain period.
- D. The Assignment Clause allows the policyowner to transfer policy rights to another party.
Group Life Conversion Privilege
A feature of group life insurance that allows an individual to convert their group coverage to an individual policy (typically whole life) upon termination of employment or group eligibility, without evidence of insurability.
- Available upon termination of group coverage
- No proof of insurability required
- Must be exercised within a specific timeframe (e.g., 31 days)
- Usually converts to a whole life policy
Memory trick: Group to individual, like leaving the flock but keeping your feathers.