When can an employee exercise the conversion option for group term insurance?

An employee can exercise the conversion option for group term insurance within 31 days of terminated employment. This conversion privilege allows the employee to convert their group life insurance coverage to an individual policy without having to provide evidence of insurability. The purpose of this time frame is to ensure that individuals who may lose their employer-sponsored insurance have a limited, but reasonable, period to secure their coverage.

If an employee tries to exercise the conversion option immediately upon termination, they may not yet have all the necessary information about their benefits or the process to convert their policy. Waiting longer than 31 days may result in the loss of the conversion option altogether, as this can be a window where they become ineligible. Additionally, the conversion option is not available at any time during employment, as it specifically relates to the cessation of group coverage due to termination of employment. This structure supports the principle of ensuring continued protection while transitioning to individual policies.