A covered employee's group life insurance terminates and the 31-day conversion period begins. The employee dies on day 20 of that period without completing a conversion application. Under CIC Section 10209, the insurer will:
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Why A is correct
Section 10209 provides that if the insured dies during the 31-day conversion window without having completed the conversion, the death benefit is still payable under the group policy, exactly as if the coverage were in force. The conversion right is a statutory protection, and the window is treated as a period of continued protection for the insured. This rule protects the insured's estate during the transition between group coverage and the converted individual policy. The same protection applies whether the employee died before completing the paperwork or never began it.
Why the other options are wrong
- B) Death during the conversion window is protected by statute; the failure to complete the conversion does not defeat the claim. The protection covers the period between termination of group coverage and completion of the conversion.
- C) The group death benefit is payable in full, not a refund of the employee's contributions to the plan. The statute treats death during the window as covered even without a completed application.
- D) Group term coverage has no cash value; the benefit payable is the group death benefit, not a cash value amount. The full group death benefit is payable, not merely the employee's share of the premium contributions.
Memory hook
Die inside the 31-day window and the group policy still pays. The conversion clock is also a protection shield.