In group life insurance, what feature allows an employee to maintain coverage after leaving the company?

In group life insurance, the feature that allows an employee to maintain coverage after leaving the company is known as conversion. This provision enables the insured individual to convert their group life insurance policy into an individual policy without needing to provide evidence of insurability. Typically, this option is available for a defined period after termination of employment.

Conversion is essential because it ensures that individuals can continue to have life insurance coverage even if their employment status changes, thus protecting their beneficiaries. The individual usually has to apply for this new policy within a specific time frame, which is often 30 or 31 days after the group policy ends. The premium for the new individual policy may be higher since it is not based on the group rates.

Understanding this feature is vital for employees, as it provides a safety net to prevent a lapse in coverage during life transitions, unlike other choices that may not directly support continued insurance protection post-employment.