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Converting Group Life Insurance

How Much Can I Convert?

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The usual life insurance policy issued to groups is Group Term Life Insurance. Generally, there is a to convert your coverage to an individual policy in three different scenarios. The amount of coverage that can be converted will vary depending on the event that "triggers" your right to convert.

If you leave the employer or group

If you leave your employer or other group through which you have group life insurance coverage, your eligibility for group insurance will end. In most circumstances, this triggers a right to convert the full amount of your insurance to an individual policy.

A change in status

For example, if you have life insurance coverage through an employer as a full time employee and you change your status to part time, you may no longer be eligible for coverage at all, or you may not be eligible for the same amount of coverage. In this scenario, you generally can convert the amount of coverage that you would lose as a result of this change in status.

Cancellation of the group policy

The third scenario which may trigger a right to convert to individual insurance is when the group that issues the insurance cancels the entire group policy. In this scenario, the amount that you can convert is often "capped". For example if you have $100,000 in group coverage and the entire group policy is cancelled, you may only be able to convert $10,000. The reason for this is that it is generally assumed that when a group policy is cancelled, it is being replaced by insurance with another carrier.


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