Question

Which of the following statements regarding conversion rights of a group policy is correct?

a) Group policyholders have no conversion rights.
b) Group policyholders have the right to convert to an individual policy without evidence of insurability.
c) Conversion rights only apply to term life insurance.
d) Conversion rights are the same for all insurance companies.

Answer 1

Group policyholders have the right to convert to an individual policy without evidence of insurability.

Step-by-step explanation:

The correct statement regarding conversion rights of a group policy is b) Group policyholders have the right to convert to an individual policy without evidence of insurability.

In group life insurance policies, conversion rights allow policyholders to convert their group coverage into an individual policy if certain conditions are met. This typically includes converting within a specified time period and not exceeding a certain age limit. Conversion rights are important as they provide individuals with the option to maintain coverage even if they leave the group or their employment status changes.