What is the difference between Conversion and Portability of Life Insurance?
GU provides all full-time benefit eligible employees with a $30,000 basic group term life insurance policy* at no charge to the employee. If you leave employment, you would have 31 days to convert this policy to a whole life policy**.
If your employment is terminated at GU and you desire to convert the $30,000 basic term life insurance coverage to a whole life policy, you must complete and submit the attached Conversion Application within 31 days of the date of termination. When you convert a term policy to a whole life policy, initially the premium is higher, but will never increase and as long as you are making your payments, the policy cannot be canceled by the carrier. More information on life insurance conversion can be found on the attached Conversion Brochure.
If you are carrying Voluntary Employee Life insurance & AD&D, Voluntary Spousal Life & AD&D and/or Voluntary Child(ren) life insurance through GU that you are personally paying for (by payroll deductions) and your employment terminates, but you would like to continue your voluntary life coverages, you would have two different options available to you. You could convert as described above or choose portability.
Portability is to continue with the policy in its current form (term), knowing that there will be premium increases based on the age banded rates and that the benefit amount will decrease by 35% at age 70 and an additional 15% at age 75. If you choose to port your voluntary life benefits, you need to complete the attached Portability Application within 31 days of employment termination.
*Term Life Insurance - a life insurance policy that is bought for a specific amount of time (10, 15, 20, 25 or 30 years). There premium will reflect a guaranteed amount that will be paid in the event that you die before the policy expires.
**Whole Life Policy - Is the type of life insurance that remains in effect for as long as you life, provided the premiums are kept up to date. In addition to the payout value, whole life policies include a cash value account that can be used by the policyholder even while the insured person is still living.