A terminated employee applies for conversion on day 20 of the 31-day conversion period but dies before the individual policy is issued. The death benefit:

Why A is correct

Under CIC Section 10209, if the employee dies within the 31-day conversion period - whether or not the conversion application has been completed or the individual policy issued - the death benefit is paid under the group policy as though coverage had remained in force. This protects the insured from a coverage gap: the group coverage is deemed to continue during the window, and the insurer cannot deny the claim because the converted policy was not yet issued. The group benefit amount, not the would-be individual policy, governs the payout.

Why the other options are wrong

• B) The group coverage is deemed to continue through the conversion window, so the benefit is payable even if the new policy was not issued.
• C) Premiums paid is not the measure of the benefit. The group death benefit amount applies to the claim.
• D) The guaranty association pays only when an insurer becomes insolvent, which is not the situation described here.

Memory hook

Die inside the 31-day window, and the group policy still pays.