Under CIC Section 10209, if a former employee dies during the 31-day conversion period without having applied for the individual policy, the death benefit is:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Section 10209(a)(4) expressly provides that if the employee dies during the 31-day conversion period before the individual policy becomes effective, the amount of insurance the employee was entitled to convert is payable as a claim under the group policy, whether or not an application for the individual policy or payment of the first premium has been made. The conversion window functions as a bridge of coverage, so the family is protected even when the paperwork has not been completed. This rule is a critical consumer protection because it removes the risk of a gap in coverage while the former employee decides whether to convert.
Why the other options are wrong
- B) The statute protects the employee during the conversion window regardless of whether an application was submitted. The absence of paperwork does not defeat the family's claim under the group policy.
- C) Payment under the group policy does not depend on the former employee having paid the first premium on an individual policy. The group contract itself pays the claim during the window.
- D) The full amount the employee was entitled to convert is payable under the group policy. There is no reduction to half or any other fraction of the group death benefit.
Memory hook
Death inside the 31-day window = the group policy pays. The conversion right is a coverage bridge.