What right does the conversion privilege give to an employee whose employment is terminated under a Group Life policy?

The conversion privilege allows an employee whose employment has been terminated to convert their group life insurance coverage into an individual policy without having to provide evidence of insurability. This means that even if the individual has developed health issues or concerns since the time they first obtained their group insurance, they can obtain personal coverage at standard rates. This provision is crucial as it provides a safety net for individuals who may find themselves without life insurance coverage after losing their job, thereby ensuring they can maintain a level of protection for their beneficiaries.

The other options do not accurately reflect the purpose of the conversion privilege. For instance, increasing benefits or reinstating a group policy is not typically involved in this privilege; instead, it specifically facilitates the transition from a group plan to an individual plan. Additionally, the right to receive a lump-sum payout pertains more to policy proceeds rather than the conversion feature itself.