Question

Group life plans sold in MA typically contain a conversion option. If the insured elects this option, the new policy ________.

A) Requires additional premium payments.
B) Automatically renews for another term.
C) Converts to a permanent policy without evidence of insurability.
D) Terminates immediately.

Answer 1

When the insured elects the conversion option in a group life plan in MA, the policy converts to a permanent policy without the need for proof of insurability, but typically requires higher additional premium payments due to the nature of permanent life insurance.

Step-by-step explanation:

Regarding group life plans in MA with a conversion option, when an insured elects this option, the new policy converts to a permanent policy without evidence of insurability. This means that regardless of the insured's current health status or any other factors, they can convert their group (often term) life insurance policy into an individual permanent policy.

However, while this option provides security for the policyholder in maintaining insurance coverage, it often comes with a requirement for additional premium payments which are usually higher than the premiums for term policies due to the lifelong coverage and cash value accumulation associated with permanent life insurance.