Massachusetts Life Producer Practice Exam

What is the name of the provision that allows an employee to convert group life coverage to an individual policy?

1. Transfer provision

2. Continuation provision

3. Conversion provision

4. Reinstatement provision

The correct answer is: Conversion provision

The provision that allows an employee to convert group life coverage to an individual policy is known as the conversion provision. This provision is essential because it provides individuals who lose their group life insurance due to events such as leaving a job or retirement the opportunity to maintain life insurance coverage without having to prove insurability, regardless of their health status at the time of conversion. This continuity of coverage can be crucial for individuals who might otherwise struggle to obtain personal life insurance due to medical conditions or changes in health. The conversion process typically involves the individual being able to convert their group policy into an individual policy within a specified period, often 31 days from the termination of group coverage. This ensures that individuals do not have a gap in their life insurance protection during a potentially vulnerable time when they are adjusting to a new insurance situation.