If you have a group life insurance policy, you’re in good company. According to the American Council of Life Insurers, “In 2017, group insurance represented 46 percent of all life insurance policies in force”1.
Group life insurance can be appealing to small business owners for a few reasons. For starters, group coverage can be less expensive than individual policies since most of them are term life policies. Aside from the expenses, there are a few different reasons a small business owner would look into group life insurance.
Group life insurance is a benefit offered by groups to their members, often by employers to their workers.
Group life insurance is a great benefit that can be used to provide some financial protection to your loved ones if you were to die, which is probably why so many people have it.
However, since group life insurance is usually offered to a group of employees, you might be wondering if you can keep your coverage if you were to leave your employer. You might be wondering, can I convert a group life insurance policy to an individual policy?
That answer depends on if the coverage you have has a conversion privilege, or is portable.
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According to Investopedia.com, “The conversion privilege provision allows an employee that participates in a group plan to convert their group life insurance policy into an individual life insurance policy,” and doesn’t involve additional approval processes or medical exams2.
If you have group life insurance that is voluntary, meaning you chose to pay premiums for it, it may be portable. According to insure.com, “The voluntary coverage you buy through the group may be portable, meaning you continue it after you leave the company”3. So if you change jobs or retire and your coverage is portable, you can retain it as long as you pay the premiums to the insurance company.
If you have questions about whether your group life insurance is convertible, if your rates will change upon conversion, or any other questions about your policy, you can refer to your policy and contact your benefits administrator or the insurance company through which you have your policy.
- LIFE INSURANCE March 31, 2019
- Conversion Privilege March 26, 2019
- The basics of group life insurance March 27, 2019
Categories: Group Life, Insurance