Group Life Conversion Option

Strike out on your own
with group conversion.
Photo by Lee Chisholm

Most employee benefit plans  provide group life coverage, which allows the applicant to convert their group plan, without a medical evaluation, to an individual life plan upon the termination of their employment. This can be a good value to applicants who have serious health issues, such as a history of cancer, stroke or heart disease, which can make individual coverage difficult to attain.

The insurance company does buffer itself by charging a much higher premium on group life conversion. This extra premium is meant to mitigate its risk that the applicant may not be in good health at the time they convert their coverage. Be aware that most group conversion plans are priced 50 to 100% higher than equivalent individual life insurance coverage. There are also limitations on the face amounts and the type of plans group life policies can be converted to. Most group plans have a maximum conversion amount of two times the employee's salary up to $200,000.

In addition, policies are often limited to a one year term. Some insurance companies will allow the applicant to try and obtain individual life insurance coverage via a group alternate, but if he/she is not approved (as long as it is within a certain time period) they can proceed with the group life conversion option.

The wording and requirements for group conversions differ from company to company, so it is crucial your broker is familiar with your insurance carriers group conversion guidelines.

For more details, you can contact us at 1-866-899-4849, or you can get a term life quote by visiting our Instant Quote Calculator.