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Overview

In general, if you terminate employment (due to voluntary or involuntary termination of employment or retirement), your group life and disability coverage will terminate on the date of your termination. 

Certain life and disability insurance policies include a privilege such that you may be able to continue a portion of your coverage after termination of employment or after you are no longer eligible for the group policy. There are two potential types of coverage extensions: Conversion and Portability. These benefits are overlooked because they can be difficult to navigate.

This article provides basic information to help you understand your options and make the best decision for your personal needs. This information is not meant to be all inclusive, as each carrier (and plan) has specific requirements. Additionally, not all carriers offer the Conversation or Portability options. Please be sure to check directly with your insurance carrier on the details of your plan options when attempting to “Convert” or “Port” your existing Group Life Insurance Benefits.

Restrictions

Conversation privileges and portability provisions are not universally included in all contracts. In addition, conversion provisions are often limited in the coverage that may be continued and/or the circumstances under which coverage conversion may be elected. Check your life or disability Certificate of Coverage to confirm whether any conversion privileges are offered under your contract. Life insurance and disability benefits are not subject to COBRA continuation provisions. 

Conversion

You may be able to convert all, or a portion of, your existing Group Life Insurance to an individual policy that you may continue after your employment terminates. 

Conversion of your existing Group Life Insurance can be a good option if you are not eligible for a portability option, a portability option does not exist, or you would not meet the underwriting requirements for an individual life insurance policy. Whether a conversion provision is required on your Group Life Insurance is governed by the laws of your state, however, most Group Life Insurance policies include a conversion option. 

Conversion rates are typically more expensive than portability rates and/or individual rates that are underwritten with current health information.

To confirm whether a conversation privilege is available on your policy and any specific requirements or restrictions on the conversion privilege, refer to your insurance Certificate of Coverage or contact your insurance company. 

Portability

Portability is a different option that allows you to continue your Group Life Insurance coverage. Portability typically offers more favorable rates and policy provisions than a Conversion option. Rates are less expensive than conversion rates and may be less expensive than individual policy rates if you have a health condition. 

Whether a Portability provision is included on your Group Life Insurance is determined by your carrier and the specific policy provisions purchased by your employer. When available, you may be eligible to port all, or a portion of, your existing Group Life Insurance coverage, depending on the policy provisions.

You may have to provide proof of insurability to the carrier, and coverage may be declined based on the health information you and your physician provide.

To confirm whether a portability privilege is available on your policy and any specific requirements or restrictions on the portability provision, refer to your insurance Certificate of Coverage or contact your insurance company. 

Premium Contributions

Premium contributions will vary based on your life insurance carrier, the available plans, and your age. Please contact your current carrier directly for information relating to premiums.

Timing Requirements

If any conversion privilege or portability coverage is available, it must be elected in writing within 30 days of the termination of coverage. 

What if I Do Nothing?

After 30 days you will no longer be able to “convert” or “port” your existing policy. This also means that you will not be eligible to do so in the future.