35. Which of the following is a characteristic of conversion from group to permanent life insurance?
Answer: C
Conversion must be applied for within thirty-one days of termination.
When converting from group to permanent life insurance, it is essential to apply for the conversion within thirty-one days of the termination of the group coverage. This timeframe allows individuals to secure their new policy without needing to provide proof of insurability.
A) Proof of insurability is required.
This option is incorrect because one of the benefits of converting from group to permanent life insurance is that proof of insurability is typically not required, as long as the application is made within the specified period after group coverage ends.
B) Conversion must be to term insurance.
This statement is incorrect because the conversion process allows for transitioning to permanent life insurance, not just term insurance. The nature of the conversion is specifically to enhance coverage rather than limit it to term.
C) Conversion must be applied for within thirty-one days of termination.
This option is correct, as it accurately reflects the requirement that individuals must apply for conversion within thirty-one days after the termination of their group life insurance coverage to ensure that they can obtain a permanent policy without additional requirements.
D) Premium for the new policy will be based on the age when first covered by the group policy.
This statement is incorrect because the premium for the new permanent policy is based on the individual’s age at the time of conversion, not when they were initially covered by the group policy. This means the premium may be higher if the individual has aged since their group coverage began.
Conclusion
The correct answer, C, is definitive as it highlights the critical timeline for applying for conversion, ensuring that individuals maintain their life insurance coverage seamlessly. All other options fail to accurately describe the characteristics of the conversion process, either by misrepresenting requirements or the nature of the new policy. Understanding these specifics is vital for anyone transitioning from group to permanent life insurance.