Life License Qualification Program (LLQP) Practice Exam

What is a standard provision for conversion privileges in a Group Life policy?

1. Coverage can only be converted if the employer pays

2. Conversion must happen within 6 months

3. Coverage can only be converted with evidence of insurability

4. Coverage can be converted at regular rates on an attained-age basis

The correct answer is: Coverage can be converted at regular rates on an attained-age basis

The correct understanding relates to the standard provision for conversion privileges in a Group Life policy. Under most Group Life insurance arrangements, when an employee's coverage ends—whether due to leaving the job, reaching a certain age, or other qualifying events—the individual usually has the right to convert their group coverage into an individual policy without needing to provide evidence of insurability. This conversion typically can happen at regular rates but is calculated based on the individual's attained age at the time of conversion. This means that the premiums may increase to reflect the individual’s age rather than the generally lower group rates provided during the employment period. This provision is important because it allows individuals to maintain life insurance coverage even after their group policy ends, ensuring continuity of coverage and financial protection. The other options do not accurately reflect the standard provisions regarding conversion privileges in Group Life policies. For instance, the requirement for the employer to pay, the stipulation of a specific conversion timeline like six months, or the need for evidence of insurability are not aligned with the typical standards which facilitate a smoother transition for policyholders. Thus, the focus on attained-age basis for premiums makes option D the accurate choice.