SW Legal Educational Publishing

Right to Convert Policy Does Not Continue Coverage
Description Former employee killed less than a month after leaving employment. His life insurance policy had a right of conversion within 31 days of leaving employment. Because he had not elected to convert to a personal policy, there was no coverage in effect during the conversion period.
Topic Insurance
Key Words Conversion, Coverage, Election, Benefits
C A S E   S U M M A R Y
Facts Larry Sippel ended his employment on 2/25/93; he was killed in a car accident less than 31 days later. A life insurance policy that had been in effect while he was employed had a right of conversion to an individual policy, which must be applied for within 31 days after coverage ends. The policy provides: "The converted policy will: (a) take effect on the date of termination of this insurance, or on the date of application for the converted policy, whichever is later." Sippel's widow sued for life insurance benefits, the insurer asserted they were not owed.
Decision The decision of the district court that payment was not owed is affirmed. Sippel's coverage ended when he left his employer. He had 31 days to apply for conversion, but he did not make the application. Hence, individual coverage never took effect. The employer's policy did not extend for 31 days beyond termination of employment; that was just the time period in which the employee could elect to continue coverage.
Citation Sippel v. Reliance Standard Life Insurance Co., ---F.3d--- (1997 WL 702913, 8th Cir.)
or
128 F.3d 1261 (8th Cir., 1997)

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