There are many different types of life insurance policies on the current market for people to buy. Helping to cover a wide range of problems and possible situations, they also vary in payments, as well as stipulations set by the companies that provide them. These stipulations may have a very basic common ground, but they also vary heavily on the requirements and guidelines of the policies, as they can sometimes be for an entire group, instead of just an individual policy holder.
Because there are large differences between group policies and individual policies, the stipulations generally dictate that, if you are in a certain situation with regards to a company or place of work, you may have to convert your policy for it to be active. This usually comes when a currently insured member in a group policy leaves said group, and since they left the group, they are no longer eligible under their old contract. This can lead to some extremely confusing situations, which you may be liable for.
Who needs to convert their Life Insurance?
This is not a common thing that occurs when dealing with Life Insurance. This situation will usually occur when someone is attempting to change from a company’s group insurance policy over to an individual life insurance policy. The reason for the switch can generally be chalked up to one of the following reasons, if it is from a company:
- Employee retires or is put on disability and is no longer eligible
- Employee has been fired from place of employment
- Employee quits, and moves on to a different company
These are just a few reasons as to why a mandatory life insurance switch from group to individual would be necessary. Most policies would have a certain grace period after the insured has been fired, so the immediate effects of a contract not being transferred might not be warranted.
Common Problems with Transferring
There can be several reasons as to why a policy has not been transferred properly after the insured has been let go at his or her job. One major reason that is usually the case is that, when the insured retires or is put on disability, they receive a letter stating that their life insurance policy is still active and in effect. Depending on the nature of the group life insurance policy, this could be true, so it is important to hold a copy of the life insurance policy at all times.
Almost all company life insurance policies have a grace period of thirty-one days after the day of release from the company to get the life insurance policy swapped over to an individual policy. This period can come under question if the insured passes away within this time frame, and as such, it is important to get the exact date and time of the release from the job, as that will help to exonerate the insured of being denied.
These are just a few reasons as to why you may be denied the claim of the life insurance. As such, always talk to an experienced life insurance lawyer or attorney here at our offices to help maximize your chances of getting the most out of your case. No matter what the insurance company tells you, always make sure to have our attorneys read over and confirm or deny their reasons, as they may just be trying to save a few dollars on their end. We understand that this isn’t just money for you, it is your life.