Tennessee Life Producer Practice Exam

What type of life insurance can usually be converted to an individual policy upon retirement?

1. Term life insurance

2. Group life insurance

3. Universal life insurance

4. Variable life insurance

The correct answer is: Group life insurance

Group life insurance is typically designed to provide coverage to a group of individuals, often through an employer or an association. One of the key features of many group life insurance policies is that they offer a conversion option. This allows members of the group to convert their group coverage to an individual life insurance policy when they leave the group, such as at retirement or employment termination. This conversion is crucial because it allows individuals to maintain coverage without needing to provide evidence of insurability, which is especially beneficial if their health status changes. The ability to convert ensures that retirees have the opportunity to secure individual life insurance to continue protecting their beneficiaries, based on the terms outlined in the original group policy. In contrast, term life insurance typically expires at the end of the term and does not come with conversion options, while universal and variable life insurance are types of permanent life coverage that do not involve group structures or similar conversion clauses upon retirement.