Rhode Island Life Insurance Practice Exam

What happens to the claim submitted by a beneficiary if the insured dies while converting a group life insurance to an individual policy?

1. Full benefits are payable under the Master contract

2. The claim is denied

3. Partial benefits are payable

4. No benefits are payable

The correct answer is: Full benefits are payable under the Master contract

When a beneficiary submits a claim after the insured has died while converting a group life insurance policy to an individual policy, the full benefits are payable under the master contract. This is because most group life insurance policies have a provision that protects the coverage during the conversion process. Typically, such provisions state that if an insured individual dies during the conversion period, the claim will still be honored and the full benefits available under the group policy will be paid to the beneficiary. This is designed to provide assurance to both the insured and the beneficiary that coverage is maintained during the transition from group to individual coverage. The other options suggest scenarios where benefits either are not payable or are only partially payable, which goes against the protective nature of conversion clauses in group insurance policies. In understanding life insurance policies, it is crucial to recognize how conversion rights are structured and how they ensure beneficiaries can still receive benefits despite the timing of the insured's death during the conversion period.