Group Life Conversion After a Cancer Diagnosis
Priya, age 52, is covered by her employer's group term life plan for $300,000. She terminates employment on June 30. The group certificate gives a 31-day conversion right to an individual whole life policy without evidence of insurability, and a portability option to keep group term coverage with evidence of insurability. Priya is diagnosed with breast cancer on July 20 and wants to keep coverage. She calls the insurer on August 5 to ask about conversion. She has not yet paid any premium. Her employer's plan also includes accidental death and dismemberment coverage. She has named her sister as beneficiary.
1. What coverage options does Priya have, and what deadlines apply? Evaluate whether the cancer diagnosis affects conversion or portability.
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Priya's group coverage ended June 30. The 31-day conversion window ran through July 31. By calling August 5, she missed the deadline for the no-evidence conversion. The cancer diagnosis does not by itself extend the deadline, although some plans allow a late conversion if she was disabled or hospitalized. Portability is separate: it requires evidence of insurability, and her breast cancer diagnosis would likely make her uninsurable for portability. Her best argument is to ask the insurer whether it will accept a late conversion application as a courtesy; it is not required to do so. She should also check whether the group plan has a disability extension.
2. If Priya dies on August 10 before the insurer receives an application, is any coverage in force? Explain.
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If Priya dies August 10 and never applied or paid premium, no converted policy is in force. The group term ended June 30, and the conversion right expired July 31. A late inquiry does not create coverage. If she had applied within 31 days and paid the first premium, the converted policy would typically be effective June 30, and the claim would be covered even if she died before the policy was delivered. The AD&D coverage also ended with employment, so it would not pay for an accidental death after June 30 unless the plan had a portability feature.
3. How would the AD&D benefit respond if she died in a car accident rather than from cancer?
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The AD&D benefit pays only for accidental death or dismemberment, not for cancer. If Priya had died in a car accident while group coverage was active, the $300,000 group term would pay if death occurred during employment, and the AD&D benefit would pay separately if the accident met the policy definition. After termination, neither the group term nor AD&D continues unless the plan provides portability or conversion. Conversion generally applies to the life insurance, not to AD&D, so she cannot convert the AD&D benefit.