Our life insurance attorneys successfully recovered a $150,000 death benefit after Farmers Life denied a claim involving an employer sponsored life insurance policy. The insurer argued that coverage ended when the insured left their job and that the policy had lapsed prior to death. After a detailed investigation, we proved the insured was entitled to continue coverage through portability or conversion and that the insurer failed to properly administer those rights. The denial was reversed and the full benefit was paid to the beneficiary.
This case illustrates a common and costly problem in group life insurance claims. Coverage does not always end simply because employment ends. Portability and conversion rights often determine whether a claim should be paid.
Portability vs Conversion in Employer Life Insurance
When group life insurance is provided through employment, most policies offer one or both of the following options when the employee leaves the company.
Portability
Portability allows the insured to continue their group term life insurance coverage after separation from employment by paying premiums directly to the insurer.
Key characteristics of portability include:
Coverage remains with the same insurance company
No medical exam is required
The insured must elect portability within a short deadline, often 30 to 60 days
Coverage is usually term only
Premiums are paid directly by the insured
Portability is often used when the insured wants to keep similar coverage without reapplying or undergoing underwriting.
Conversion
Conversion allows the insured to convert group term life insurance into an individual permanent policy, such as whole life or universal life.
Key characteristics of conversion include:
Converts group coverage into an individual policy
No medical exam is required
Premiums are higher than group term rates
Coverage can last for life
Policies may accumulate cash value
Conversion is especially important for older individuals or those with health conditions who may not qualify for new life insurance.
The Practical Difference
Portability continues term coverage
Conversion creates permanent individual coverage
Both options are time sensitive and require proper notice and processing.
Why Portability and Conversion Lead to Denied Claims
Many denied life insurance claims arise because portability or conversion was never properly offered, explained, or processed. Common scenarios include:
The employer never informed the insured of conversion or portability rights
Notices were sent to the wrong address
The insured attempted to convert but paperwork was lost or delayed
Premium deductions continued, creating the belief coverage remained active
The insured died during the election window
The insurer incorrectly treated the policy as lapsed
In these situations, the insurer often denies the claim automatically. That does not mean the denial is legally correct.
How We Won the Farmers Life Insurance Claim
In this case, the insured left employment shortly before death. Farmers Life denied the claim on the basis that group coverage ended with employment. Our review showed:
The insured was entitled to port or convert the policy
Proper notice was not provided
The insurer failed to administer the continuation options correctly
The death occurred within the election period
Once these facts were presented, the insurer reversed its denial and paid the full $150,000 benefit.
When a Denial Can Be Challenged Successfully
A life insurance denial involving portability or conversion may be overturned when:
The employer or insurer failed to give required notice
The insured attempted to maintain coverage
Administrative errors caused the lapse
Coverage should have remained active during the election window
Premiums were accepted or deducted after termination
These cases often involve employer records, plan documents, enrollment materials, and correspondence that insurers do not fully review before denying claims.
Help With Denied Employer Life Insurance Claims
Denied life insurance claims involving portability and conversion are highly fact specific and frequently mishandled. Our firm focuses exclusively on denied life insurance claims nationwide and has recovered benefits in cases involving job loss, retirement, disability, and resignation.
If a claim was denied because the insured did not convert or port coverage, that denial should be reviewed carefully. Many beneficiaries are entitled to payment despite what the insurer initially claims.
We offer free consultations and work on a contingency basis. No fees unless we recover benefits.