Maryland Life and Health Insurance License Practice Exam

An employee under a group insurance policy has the right to name a beneficiary and the right to?

1. Convert to an individual policy in the event of employment termination

2. Terminate their coverage at will

3. Combine their policies with other employees

4. Change their health benefits without penalty

The correct answer is: Convert to an individual policy in the event of employment termination

The correct answer is rooted in the rights afforded to employees covered under group insurance policies. An important aspect of group insurance is that while the employer typically holds the master policy, employees still retain certain rights. One significant right is the ability to convert their group coverage to an individual policy if their employment is terminated. This provision ensures that when employees leave their job — whether through resignation, layoffs, or retirement — they can maintain their health insurance coverage without being subjected to new medical underwriting requirements, allowing them continuous coverage without gaps. Converting to an individual policy helps employees protect their health insurance benefits, especially if they have pre-existing conditions or anticipate needing care soon after leaving their job. This ability is crucial for ensuring that they are not left without coverage in a vulnerable time. Other options, while relevant in various contexts, do not represent rights typically provided under group insurance policies. For example, terminating coverage at will could lead to lapses in necessary protection, and combining policies or changing health benefits without penalty do not align with the common stipulations of group health plans, which typically have more structured and employer-controlled arrangements.