Most of you reading this Tip are covered by a group term life insurance policy.
Their popularity can be attributed to a variety of factors. Here, a few:
- Low cost; for example, $.35 (or less)/$1,000 of death benefit monthly.
- Employer paid premiums are tax deductible.
- Simplified (or no) underwriting. (One of our insurers will guarantee issue up to $50,000 of coverage on a group as small as two!)
- Voluntary ‘buy-up options for employees.
Conversely, it’s worth noting that most group life plans contain conversion rights upon termination of employment or, termination of the plan itself, without the participant being required to
provide evidence of insurability.
In Erwood v. Life Insurance Company of North America, it was determined the onus of communicating that right is on the Plan Sponsor (employer).
Tip for employees: If you have a chronic and/or serious medical condition, you’d want to explore your conversion rights if/when your group life coverage ends (changing jobs, retiring,
etc.).
Tip for employers: Check with HR to make sure conversion rights are being properly communicated on a timely basis.
P.S. June 1 marked the four year (!) anniversary of The Rauser Agency affiliation with Robertson Ryan. (As noted in Tip # 359.)
“Time flies when you’re (still) having fun!”
