Connecticut Life Producer Practice exam

What effect does terminating employment have on group insurance coverage?

1. It results in complete loss of coverage.

2. It triggers a conversion option for individual policy.

3. It allows for higher premiums.

4. It ensures immediate payout of benefits.

The correct answer is: It triggers a conversion option for individual policy.

When an individual terminates employment, their group insurance coverage typically does not continue indefinitely. However, many group insurance policies include a conversion option, which allows the former employee to convert their group coverage into an individual policy without having to provide evidence of insurability. This is an important consumer protection measure, as it ensures that individuals can maintain some form of insurance coverage even after leaving their employer. This option is particularly valuable for those who may have health issues that could make obtaining new coverage more difficult. This conversion option provides a bridge for individuals who may be transitioning to new employment or facing gaps in coverage, ensuring they can secure individual insurance coverage tailored to their needs. It’s crucial for individuals to understand their rights and options related to group insurance after employment changes to avoid losing vital health care protection.