Employee Conversion Rights
An employee whose coverage terminates may have the right to convert their group term life insurance to an individual life insurance policy without evidence of insurability.
Coverage for any dependents may also be converted at the same time.
This section includes:
When is an individual eligible to convert their group term life insurance coverage?
The right to purchase a conversion policy is available when the employee’s group term life insurance coverage ends for a reason other than the group’s coverage ending or changing (for example, an individual is eligible to convert coverage when his/her employment with the group terminates or, for dependents, when the employee dies).
When should the conversion application be submitted?
The individual must apply to Anthem Life & Disability Insurance Company for conversion in writing and pay the initial premium on the policy within 31 days after the group term life insurance ends.
When does the individual policy become effective?
The conversion policy will become effective on the date that group term life insurance ends, provided the person applies and pays the conversion premium on a timely basis.
What amount of group term life insurance can be converted?
The individual may choose to be insured for the same amount as the coverage that terminated under the group plan, or less. Once the benefit amount is selected, the premium will be calculated according to the individual’s age and any risk class rating that applied to the group coverage.
Are there any exceptions to what an employee is eligible to convert?
Yes. An employee who loses coverage because the group plan terminates or changes may have the right to convert the group term life insurance to an individual life policy. However, in this case:
the individual must have been covered under Anthem Life & Disability Insurance Company’s group life policy for at least five years; and
the amount of insurance available for conversion will be limited to the amount stated in the group certificate.
What happens if the individual dies within the time period allowed for conversion?
If the individual dies within the time period allowed for life conversion, Anthem Life & Disability Insurance Company will pay the benefit he or she could have converted, unless death benefits are payable under some other provision of the group’s insurance plan.
Who is responsible for notifying the eligible person of their conversion rights?
It is the employer’s responsibility to notify eligible persons of their conversion right. There is typically no extension of the life insurance conversion period due to delayed notice to employees of their conversion right.