Which of the following is TRUE concerning the conversion of group life insurance coverage to an individual policy?

This statement is misleading because the conversion option specifically applies under certain circumstances, such as when group coverage ends due to job loss, retirement, or reaching the maximum age limit. It does not apply universally to all termination scenarios, such as voluntary cancellation by the insured.

This choice is incorrect because the conversion policy typically does not automatically become a paid-up policy. Instead, the insured is usually required to pay premiums to keep the converted policy active, and it is the responsibility of the insured to initiate the conversion process within the specified time frame.

This statement is false since conversion policies often have different premium rates compared to the original group policy. Factors such as age, health status, and the type of individual policy will influence the premium rates, which are generally higher than those of group insurance due to the loss of group purchasing power.