Tennessee Insurance Practice Exam

What group term life feature allows an individual to leave the group and continue coverage without providing evidence of insurability?

1. Extension

2. Continuation

3. Conversion

4. Termination

The correct answer is: Conversion

The feature that allows an individual to leave the group and continue coverage without providing evidence of insurability is known as conversion. This provision is particularly important in group term life insurance policies, as it provides the policyholder with a safety net in instances where they might lose their employer-sponsored coverage due to job loss, retirement, or other reasons. When an individual converts their group term life insurance policy, they can obtain an individual policy without the need to undergo medical underwriting or provide health information. This is beneficial for those who may have health issues or other concerns that could affect their ability to secure coverage on their own. The conversion typically must occur within a specified timeframe after leaving the group, ensuring that the individual receives continuity in their life insurance coverage. In contrast, other terms such as extension, continuation, and termination do not specifically refer to the right to maintain coverage without demonstrating insurability. Extension generally relates to extending the duration of existing coverage, continuation implies maintaining a policy under certain conditions, and termination refers to the end of coverage altogether. Thus, conversion stands out as the correct choice for maintaining life insurance benefits post-group membership without the burdens of medical scrutiny.