Tennessee Life Producer Practice Exam

What option is available for a retired employee in terms of their group life contract?

1. It cannot be converted to an individual policy

2. It can be renewed at the same rates

3. It can be converted to an individual permanent policy

4. It can be sold on the secondary market

The correct answer is: It can be converted to an individual permanent policy

For a retired employee, the option to convert a group life insurance policy to an individual permanent policy is very important. This conversion option allows the retired employee to take their group coverage and turn it into an individual policy, which can provide continuing life insurance coverage beyond their employment. This is particularly beneficial as it ensures that even after retirement, the individual can maintain coverage without having to undergo new medical underwriting, which could result in higher premiums or denial of coverage due to health issues. This option typically has specific time frames and conditions that need to be met, such as the need to apply for the individual policy within a certain period following retirement. It promotes financial security for the retiree by allowing them to secure their insurability even as they age or face health challenges. Other options presented may not be applicable or may not provide the necessary flexibility and security that the conversion option ensures for a retired employee.