- 19 - covered employee converts from a C-group term policy to a C-group conversion UL policy merely by filing an application. The C-group conversion UL policy was specially designed for employees converting from the C-group term policy to individual coverage, and, absent an additional expense, it is issued only to individuals who convert from the C-group term policy to individual coverage. An insured employee has the right to convert, generally without expense, from the C-group term policy to a C-group conversion policy with equal or less face value if group coverage ceases because (1) the employee ceases employment, (2) the employee leaves the class eligible for coverage, (3) the underlying contract terminates, (4) the underlying contract is amended to terminate or reduce the insurance of a class of insured employees, or (5) the underlying contract terminates as to an individual employer or plan.12 Upon conversion, conversion credits are transferred from the C-group term policy to the C- group conversion UL policy in a total amount that would approximate the cash value that would have been present if a typical universal life policy had been purchased when the C-group term policy was first issued. Inter-American and Commonwealth 12 As discussed below, many of the individual petitioners ultimately received a C-group conversion UL policy by converting a C-group term policy. Each of these conversions occurred although none of these five conditions was met. The parties to the C-group product expected and understood that a C-group term policy could be converted at any time at the election of the insured.Page: Previous 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Next
Last modified: May 25, 2011