Rhode Island Life Insurance Practice Exam

What is typically a requirement for converting a group life insurance policy to an individual policy?

1. Complete a new application

2. Pay the full premium upfront

3. Provide proof of insurability

4. Show evidence of continuous coverage

The correct answer is: Provide proof of insurability

In the context of converting a group life insurance policy to an individual policy, providing proof of insurability is typically a requirement because it ensures that the individual applying for coverage meets the underwriting criteria of the new policy. When a person moves from group coverage to an individual policy, the insurer wants to assess the risk based on the individual's health status and lifestyle at the time of conversion. This requirement allows the insurer to evaluate whether the individual may pose a higher risk due to medical conditions or other factors, which could impact their eligibility for certain types of coverage or affect the premiums. If the person is deemed insurable, they can then obtain an individual policy that meets their needs. Other considerations in the conversion process, like completing a new application or showing evidence of continuous coverage, may exist, but the critical aspect revolves around the assessment of insurability to ensure that the individual can be properly covered by an individual policy.