Rhode Island Life Insurance Practice Exam

In Rhode Island, which action by an insurer regarding group life insurance is NOT permissible?

1. Charging additional premium for conversion

2. Requiring evidence of insurability

3. Providing conversion options within a set timeframe

4. Offering a reduced coverage option

The correct answer is: Requiring evidence of insurability

In the context of group life insurance in Rhode Island, insurers are often restricted from requiring evidence of insurability when an individual is converting their group coverage to an individual policy. This is to protect the rights of the insured and ensure that individuals who may have developed health issues during their time in the group plan are able to secure individual coverage without undergoing a new medical examination or providing health information. This approach aligns with the principle of providing consumers with the ability to retain insurance protection despite changes in their health status. The other actions mentioned, such as charging additional premiums for conversion, providing conversion options within a set timeframe, and offering a reduced coverage option, are generally permissible as they can be part of the policy provisions and terms set by the insurer and group plan. These practices allow insurers to manage risk while still providing the option for individuals to maintain life insurance coverage after their group coverage ends.