If S dies while converting her group life insurance, what happens to the claim?

When an individual dies while in the process of converting their group life insurance to an individual policy, the coverage provided by the master contract typically remains in effect. This means that full benefits are payable to the beneficiaries under the master contract.

Group life insurance policies often contain provisions that allow members to convert their group coverage to an individual policy, usually without the need for additional evidence of insurability, when they leave the group or in other specified situations. If the insured dies during this conversion process, it is the master policy’s terms and conditions that govern the benefits, ensuring that the full death benefit is available to the beneficiaries.

In contrast, when considering the other options, they often reflect conditions that are not aligned with common insurance practices. No benefits payable or partial benefits being payable would not typically apply given the provisions that safeguard the insured’s rights during the conversion process. The benefits provided under the new policy would only come into play once the conversion is successfully completed, which is not applicable in cases where the insured dies during the conversion phase. Thus, understanding the terms of the master policy is crucial for recognizing why full benefits are payable when an insured passes away during this conversion period.