Difficulty: Easy

Average Score: 100%

Which of the following is a characteristic of conversion from group to permanent life insurance?

Rationale

Conversion must be applied for within thirty-one days of termination.

In the conversion process from group life insurance to permanent life insurance, it is essential that the application for conversion is completed within thirty-one days following the termination of group coverage. This time frame ensures that the insured can maintain their coverage without needing to provide evidence of insurability.

A (Proof of insurability is required.) YOUR ANSWER

Proof of insurability is generally not required when converting from group life insurance to permanent insurance. This is one of the benefits of conversion, allowing individuals to obtain coverage without undergoing medical underwriting, which is typically necessary for new individual policies.

B (Conversion must be to term insurance.) YOUR ANSWER

This statement is incorrect as the conversion from group insurance can be made to a permanent life insurance policy, not limited to term insurance. Permanent life insurance is often the desired outcome of conversion, providing lifelong coverage, which is distinct from term insurance that only covers a specified period.

D (Premium for the new policy will be based on the age when first covered by the group policy.) YOUR ANSWER

This is misleading because the premium for the new policy will actually be based on the insured's age at the time of conversion, not when they were first covered by the group policy. This means that if the insured is older at the time of conversion, their premiums may reflect that increased age.

Conclusion

In summary, the correct characteristic of converting from group to permanent life insurance is that the application must be submitted within thirty-one days of termination. This critical timeframe allows individuals to transition their coverage effectively without needing to prove insurability. Other options either misrepresent the requirements or the nature of the conversion process, highlighting the importance of understanding the specifics of life insurance policies.

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