Final answer:
An employee with group insurance has the right to convert their policy into an individual policy if they terminate employment. Employment-based insurance can be converted to direct-purchase insurance to avoid coverage gaps, while pension insurance offers retirement income benefits with protections from the Pension Benefit Guarantee Corporation.
Step-by-step explanation:
An employee under a group insurance policy has the right to name a beneficiary and the right to convert to an individual policy in the event of employment termination. This option enables the employee to maintain their insurance coverage despite the loss of employment-based coverage. Conversion privileges allow the employee to avoid lapses in coverage and the potential for being uninsured, which could lead to significant financial risks in case of medical emergencies or health issues.
Private insurance, including employment-based and direct-purchase insurance, allows for some level of portability. However, the specifics of converting group insurance into individual policies can vary depending on the terms of the insurance contract and the regulations governing such conversions. As opposed to employment-based insurance plans, which are partially or fully funded by employers, direct-purchase insurance is obtained by individuals on their own from private insurance companies.
Pension insurance, on the other hand, is a form of long-term financial security promising to pay out an income after retirement. Companies offering pensions contribute to the Pension Benefit Guarantee Corporation to ensure some benefits for their employees even if they go bankrupt.