Primerica Life Producer Practice Test

If an employee dies after failing to convert their group life policy to an individual policy within the given timeframe, what will happen?

1. The insurer will deny the claim

2. The insurer will pay the full death benefit from the group policy

3. The insurer will pay a reduced benefit

4. The policy will lapse immediately

The correct answer is: The insurer will pay the full death benefit from the group policy

In this scenario, if an employee dies after failing to convert their group life policy to an individual policy within the specified timeframe, the correct answer is that the insurer will pay the full death benefit from the group policy. Group life insurance policies typically include a conversion privilege, allowing members to convert their coverage to an individual policy if they leave the group or if the group coverage ends. If an employee does not take action to convert their policy within the designated period, the group coverage does not immediately terminate at the time of death. Instead, the insurance company generally be obligated to pay the full death benefit as long as the employee was covered under the group plan at the time of death. This principle is designed to protect individuals and their beneficiaries, ensuring that coverage remains in effect during the transition period, even if the employees fail to secure individual policies. By avoiding immediate lapsing or reduction in benefits, this approach reinforces the value of group life policies in providing security to employees and their families.