Practical Insights: Liability for Termination of Group Life Insurance Coverage



Generally speaking, employers are not familiar with the responsibility and potential liability for failing to notify employees of their right to convert group life insurance coverage to an individual life insurance policy upon termination of employment, or their right to apply for a waiver of premiums if they are disabled and absent from work. Within the past few years, there has been a wave of litigation brought by former employees and their beneficiaries complaining about the loss of group life insurance coverage due to misrepresentations made by employers about their group coverage and the failure of employers to inform terminated employees about their rights under the group life insurance plan documents.

How does an employer minimize its risks and ensure that its former employees know about their rights to convert group life insurance coverage to an individual policy or apply for a waiver of premiums in certain circumstances?

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