An employee is leaving. Can they keep their group life coverage?
Two options at termination, both initiated within typically a 31-day window:
- Conversion: convert the group term life policy into an individual whole life policy without medical underwriting. No health questions, no exam — the employee just pays the new (significantly higher) whole life premium. Conversion is the right path for someone whose health has deteriorated and who wouldn't qualify for an individual policy on the open market.
- Portability: continue the group term life as a portable term policy, separate from the employer. Health questions may apply but premiums are usually lower than conversion. Portability is the right path for someone who simply wants to bridge between jobs and is healthy enough to be reissued.
AD&D coverage cannot be converted — it's accident-only and doesn't translate to whole life. The employer should provide written notice of these options at termination; carriers usually have standardized forms for this.
- Category
- Employee Benefits
- Audience
- For existing clients
- Topic
- Employee Benefits
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