Final answer:
Group life insurance policies typically allow for conversion to individual policies without evidence of insurability, but with higher premiums and the same or lesser coverage than the original group policy.
Step-by-step explanation:
Within group life insurance policies, there are specific provisions that apply when an individual is converting their group policy into a personal life insurance policy. First, it is important to note that conversion is indeed an option provided in most group policies. This allows individuals to maintain life insurance coverage even after leaving the group or employer through which the coverage was originally obtained.
Converted policies must be issued without evidence of insurability. This means that the insured person does not have to submit to a medical exam or provide medical information as a condition of obtaining the individual policy. However, due to the absence of underwriting and the convenience it offers, converted policies must generally have higher premiums than the original group policy.
Additionally, the amount of coverage provided by the converted policy is usually restricted to the same or lesser coverage as the group policy. This is to prevent adverse selection, wherein only those who realize that they are in poor health convert to individual policies with higher coverage amounts, which could financially strain the insurance provider.