Massachusetts State Life Insurance Practice Exam

When group life insurance coverage is terminated, the member has the option to convert their group coverage to individual whole life coverage. This conversion option is a standard provision in many group life insurance plans, allowing individuals to maintain some level of life insurance protection after losing their group coverage. By converting to an individual whole life policy, the member secures a policy that does not require them to prove insurability, meaning they cannot be denied coverage due to health issues that may have arisen while they were covered under the group plan.

This option is particularly beneficial as it provides continuity of coverage without the risk that a member may face if they were to seek a new policy in the individual market, especially if their health has changed. The individual policy would typically be based on the member's original group coverage amount, although there may be limits set by the insurance provider.

The other options presented in the question do not accurately reflect the typical options available upon termination of group life coverage. For example, conversion specifically to a term policy is not common practice; such policies usually provide a different structure and benefits. Automatic refunds of premium payments are not standard, as premiums are typically non-refundable once paid for the coverage period. Lastly, requiring a waiting period of six months before applying for individual