Texas Life Agent Practice Exam

Conversion of a Group Life Insurance policy may not be made to which of the following types of policies?

1. Whole life

2. Term Life

3. 15 year level term

4. Universal Life

The correct answer is: 15 year level term

When discussing the conversion of a Group Life Insurance policy, it is essential to understand the underlying principles governing such conversions. Typically, group life insurance policies provide the option for insured individuals to convert their coverage into individual policies without providing evidence of insurability, which means they do not need to undergo medical underwriting. The key characteristic to consider here is that conversions usually must be made to permanent life insurance policies, such as whole life or universal life, rather than to term life policies. This is because term insurance is typically temporary and does not build cash value, which contrasts with the nature of conversion options. A 15-year level term policy represents a specific type of term life insurance that covers a fixed premium and death benefit for 15 years. Under current conversion provisions, converting to a temporary form of insurance like a term policy (even one with a defined duration like 15 years) does not align with the expected outcome of providing ongoing and permanent protection. Therefore, while options like whole life and universal life are viable and often encouraged for conversion purposes, a conversion to a term policy—particularly a fixed-duration term like the 15-year level term—does not meet the criteria established for converting a group life insurance policy. Understanding these nuances helps clarify why certain policies