Which statement is CORRECT about group life conversion privileges?

The correct answer highlights an important feature of group life insurance policies known as conversion privileges. When an employee is no longer eligible for group coverage—whether due to employment termination or another qualifying event—they often have the option to convert their group life insurance to an individual policy.

One key point of these conversion privileges is that coverage will continue during the conversion period. If an employee passes away during this time, the death benefit is paid out to the beneficiaries, regardless of whether the individual chose to convert their policy. This provision protects the policyholder's beneficiaries from losing coverage unexpectedly due to the individual's decision regarding conversion.

Other options present statements that aren't accurate regarding standard conversion privileges. For instance, the conversion timeline can vary, and employees typically have a longer window than just 30 days in many group policies, which renders that choice less accurate. Similarly, while most group life insurance policies may allow only full-time employees to initially enroll, the conversion rights typically extend to all eligible participants without that restriction. Lastly, the assertion that the policy can only be converted to a term policy is also misleading, as conversions can often be made to various types of individual policies depending on the insurer’s regulations and offerings.