Oklahoma Life Producer Practice Exam

What allows employees to convert their group policy into an individual policy after their employment ends?

1. Conversion privilege

2. Universal benefit option

3. Individual policy extension

4. Pension conversion clause

The correct answer is: Conversion privilege

The conversion privilege allows employees to convert their group life insurance policy into an individual policy upon the termination of their employment. This provision is vital because it provides a safety net for employees who may lose their group coverage when they leave their job, ensuring they can maintain life insurance protection without having to provide evidence of insurability. This privilege typically applies to situations such as retirement, job loss, or any instance where the group policy ends, granting former employees the opportunity to continue their coverage without the risk of being denied due to health issues that could arise after leaving the group plan. This benefits employees by offering continuity of coverage and peace of mind during a time of potential financial uncertainty. Other options like the universal benefit option, individual policy extension, and pension conversion clause do not specifically address the process of converting group policies to individual ones after employment ends, making them less relevant in this context.