Life License Qualification Program (LLQP) Practice Exam

Which feature of a group Term Life policy allows an individual to leave the group and continue their insurance without evidence of insurability?

1. Owner's Rights clause

2. Incontestable Period

3. Insuring Agreement

4. Conversion privilege

The correct answer is: Conversion privilege

The conversion privilege is a critical feature of a group Term Life policy that enables an individual who leaves the group—whether due to employment change or other reasons—to continue their life insurance coverage without needing to provide evidence of insurability. This means that the individual can convert their group coverage into an individual policy, which offers continuity of coverage regardless of any changes in their health status that might affect their ability to obtain life insurance in the future. This feature provides significant peace of mind as it protects against the risk of being uninsurable after leaving the group. It is an essential benefit for individuals who may have developed health issues while covered under the group plan and would otherwise face challenges in acquiring individual coverage. The other concepts listed do not offer the same benefit. The owner's rights clause pertains to the rights of the policyholder regarding the policy, the incontestable period ensures that the insurer cannot contest the policy after a certain period, and the insuring agreement outlines the terms of coverage. None of these address the issues related to continuing insurance after leaving a group.