Question

22 nazar is serving his notice period as he is soon partnering with his friend to join his restaurant business. nazar is covered under his employer’s group insurance plan. he wants his life insurance coverage to continue as he was recently diagnosed with high blood pressure. nazar is thinking of purchasing a new individual life insurance contract instead of using the conversion option. why is the conversion option more suitable for nazar than a new individual insurance contract?
a. nazar will have fewer restrictions and exclusions on a converted policy.
b. the conversion option will be more favorable for nazar considering his recent health diagnosis.
c. nazar will have access to more riders and supplementary benefits with a converted policy.
d. the conversion option will provide nazar with coverage of up to $500,000 without evidence of insurability.

Explanation:

To solve this, we analyze each option:

• Option a: Conversion policies typically have fewer restrictions/exclusions than new individual policies, especially for those with health issues (Nazar has high blood pressure). A converted policy from group to individual often avoids the need for new underwriting (which would be tough with his diagnosis), making it more favorable.
• Option b: Conversion option doesn't give more riders/supplementary benefits than a new policy necessarily.
• Option c: Conversion option usually doesn't provide higher coverage without evidence of insurability; in fact, it's about continuing coverage with existing terms, not increasing without proof.
• Option d: Conversion is about continuing coverage, not avoiding evidence of insurability in a way that's the main reason here—main reason is favorable terms post - health diagnosis.

Answer:

a. The conversion option will be more favorable for Nazar considering his recent health diagnosis.