Massachusetts Life Producer Practice Exam

The conversion option for group term insurance may be exercised by an employee...

1. After 60 days of terminated employment

2. Within 31 days of terminated employment

3. At any time during employment

4. After one year of employment

The correct answer is: Within 31 days of terminated employment

The conversion option for group term insurance is designed to provide employees with the ability to convert their group coverage to individual coverage after their employment ends or when they lose eligibility for the group plan. This option is crucial as it allows the employee to maintain life insurance coverage without having to provide evidence of insurability, which could otherwise be a requirement for obtaining individual life insurance. The correct choice states that an employee may exercise the conversion option within 31 days of terminated employment. This time frame is standard in many group insurance policies, giving the former employee a limited window to make the conversion decision. The other answers imply different timelines or conditions that do not align with typical conversion rights. For instance, allowing conversion after 60 days or after one year of employment would not provide the immediate protection that the conversion option is intended for, especially since the risk of being uninsurable could increase after such delays. Similarly, suggesting that an employee could convert at any time during employment does not reflect the fact that typically, conversion opportunities only present themselves after employment ends or eligibility changes. Understanding these timelines is vital for both insurance producers and clients to ensure continuity of coverage.