Conversion vs Portability

Conversion vs. Portability of Life and AD&D Insurance
What Coverage can be Ported or Converted? Both Life and AD&D coverage can be ported Only Life coverage can be converted

Employees and Dependents Can port coverage if:

  • employment terminates;
  •  the employee retires; or
  •  the employee reduces hours below the minimum required for eligibility.

Dependents can also port if the employee dies or there is a divorce. Once dependent children lose their dependent status, their portable coverage would cease.

Employees and Dependents can convert their coverages when their group coverage ends for any reason, their portable coverage ends, or if they have been insured for at least 5 years under the group plan and either their group policy (summary of benefits) is canceled with UNUM or changes so the insured’s insurance class is no longer eligible (refer to maximum conversion amount).
Plan Type Portable insurance is a continuation of group insurance with group rates. Converted insurance is an individual, whole-life level, premium plan. The insured may elect one year of preliminary term insurance under the whole life plan. Rates are significantly higher than group rates.
Limitations or Exclusions Employees and Dependents may NOT port coverage for themselves if they are sick or injured. Employees must certify that they and their dependents are not sick or injured in order to port coverage on the port application (sick or injured means a sickness or injury that has a material effect on life expectancy).
Employees and Dependents may convert coverage if they are sick or injured.
Additional Contract Features Portability includes Accelerated Death Benefits, Waiver of Premium, and AD&D as long as they are available under then group plan. Supplementary services such as survivor support and Assist America are not included.
The individual whole life plan under conversion does not contain supplementary benefits such as Accelerated Death Benefits, Wavier of Premium, Survivor Support, or AD&D Benefits.
Change in Coverage Amounts Amounts of Life Insurance may be decreased or increased with Evidence of Insurability up to the maximum noted above.
Once the coverage is converted, the amount of coverage cannot be increased. The amount covered under the group plan or a lower amount of insurance may be converted.
Maximum Coverage Amounts Allowed Employee: The maximum coverage amount is the lesser of:
  • the employee’s group maximum benefit;
  • 5X the employee’s annual salary;
  • $750,000 from all UNUM Life and AD&D plans combined.

Spouse: The maximum ported Life coverage will not be more than 50% or 100% of the employee’s ported coverage depending on the state. The 50%/100% rule does not apply to spouse AD&D.

Child: The maximum benefit is the lesser of 50% or 100% (varies by state) of the employee’s amount or $20,000.

In all instances, AD&D cannot exceed the Life amount ported.

Employees and Dependents: The maximum coverage amount is the amount they are insured for under the group plan. If the employee and dependent have been insured for at least 5 years and the policy (summary of benefits) is canceled with UNUM or changes so their insurance group (class) is no longer eligible, the maximum will be lesser of $10,000 or the employee’s or dependent’s coverage amount under the plan less any amounts that become available under any other group life plan offered by their employer within 45 days after cancellation.
Application Period There is a 31-day portability application period.
There is a 31-day conversion application period.
What if and employee is rehired after porting or converting? Employees that port their coverage, return to work, and again become insured under the plan are eligible to port their coverage again, subject to the maximums noted above.
Employees that convert, return to work, and again become insured under the plan are not eligible to convert to an individual policy again. However, the employee need not surrender the individual life policy when they return to work.
Can Rates Change? Portability rates may be changed for reasons which affect the risk assumed.
Conversion premium is a level premium for the life of the policy.
If an employee dies, can dependents port/convert? If an employee dies under the group plan, the dependents can port their current coverage (the spouse must port in order for the children to port). If an employee dies under the group plan, the dependents can convert their coverage (spouse and/or child).
Does age reduction apply? Can Dependents be added to a ported or converted plan at a later date?
Employee’s and dependent’s coverage amounts will reduce according to the group plan. Converted amounts do not reduce. Note that ported coverage that is reduced may be converted.
Can Dependents be added to a ported or converted plan at a later date? Once an employee elects portability, dependents may be added at any time for the amounts allowed under the group plan (subject to Evidence of Insurability). Once coverage is converted, dependents who did not initially convert coverage may not do so at a later date.
Are there state specific Application Forms or are they Generic? No. Yes - Based on the Resident state of the applicant rather than the situs)