Life Insurance Conversion Rights Fact Sheet

Christian Lassen, Esq. | Quoted in The Wall Street Journal | 25 Years Experience Helping beneficiaries nationwide challenge denials involving missed or mishandled conversion rights

What Are Life Insurance Conversion Rights

Life insurance conversion rights allow an insured to convert group life insurance coverage into an individual policy without providing proof of insurability. Conversion rights typically arise when employment ends, hours are reduced, or group coverage otherwise terminates.

Conversion rights are common in employer provided group life insurance policies and are governed by policy terms, ERISA requirements, and applicable federal or state law depending on the plan.

When Conversion Rights Apply

Conversion rights usually apply when:

• Employment terminates or hours are reduced
• Group life insurance coverage ends or is reduced
• Eligibility under the group plan changes
• Retirement occurs
• Employer sponsored coverage is discontinued

The right to convert is time limited and must be exercised within a specific period.

Common Conversion Deadlines and Requirements

Most group life insurance policies require conversion within a short window after coverage ends.

Typical conversion rules include:

• Conversion deadlines of 30 to 60 days after coverage ends
• Written notice requirements by the employer or insurer
• Application submission within the conversion period
• Payment of the first premium to activate coverage

Failure to provide proper notice can extend or preserve conversion rights.

Why Conversion Based Denials Occur

Life insurance claims are frequently denied based on alleged failure to convert coverage. Common scenarios include:

• The insured was never informed of conversion rights
• Conversion notices were sent to incorrect addresses
• Employers failed to provide required notices
• Applications were submitted but not processed
• Premiums were paid but coverage was later disputed
• Coverage reductions were not clearly explained

Many conversion denials fail when notice and compliance requirements are examined closely.

Legal Principles Beneficiaries Should Know

Important legal protections apply to conversion disputes:

• Employers may have a duty to provide conversion notices
• Failure to notify can preserve conversion rights
• ERISA may override strict policy deadlines
• Courts often protect reasonable reliance by insureds

Conversion rights are strictly regulated, and insurers must prove compliance.

What To Do If a Claim Is Denied for Failure to Convert

If a life insurance claim is denied based on alleged failure to convert, beneficiaries should act quickly.

Request plan documents and conversion notices
Obtain employment and termination records
Collect correspondence regarding benefits and coverage
Confirm whether notice requirements were met
Avoid accepting the denial without legal review

Conversion disputes are highly fact specific and often winnable.

Key Takeaways

• Conversion rights allow continuation of life insurance without medical underwriting
• Missed or mishandled conversion rights are a common cause of wrongful denials
• Notice failures can preserve conversion rights
• Prompt legal review significantly improves outcomes

For additional guidance, see our ERISA life insurance denial pages or contact our office for a free consultation.