6.1 Ohio Group Life Insurance Requirements

What Makes a Group Eligible

Group life insurance is one master contract issued to a sponsor (employer, union, association) covering many lives, where the sponsor is the policyowner and individual members receive certificates rather than policies. Because the insurer underwrites the group rather than each person, members generally need no evidence of insurability up to a guaranteed-issue limit.

Ohio recognizes several eligible group types, each with anti-selection safeguards so the group is not formed mainly to buy insurance:

Non-Discrimination and Eligibility

The defining feature of true group coverage is that benefits are tied to an objective class (salary band, job class, length of service) — never to an individual's health or to the owner's discretion. A formula such as "2x annual salary, rounded to the next $1,000" is permissible; "$500,000 for the president, $25,000 for everyone else" without a class basis is discriminatory.

• Eligible class: all full-time employees in the defined class must be offered coverage.
• Waiting (probationary) period: new hires may serve a short period (commonly 30–90 days) before becoming eligible.
• Enrollment period: after eligibility, the employee has a window (e.g., 31 days) to enroll without evidence; enrolling late triggers underwriting.

Participation Requirements (a top exam trap)

The logic: when the employee pays nothing, there is no adverse-selection risk, so all must be in. When employees contribute, the insurer requires high participation so healthy lives do not opt out and leave only sicker ones. Adverse selection is the central concern of all group underwriting — the risk that only those who expect to use coverage will buy it. High participation thresholds, defined enrollment windows, and the requirement to enroll without evidence only during the initial window all exist to defeat adverse selection.

A worker who declines coverage when first eligible and later wants in must usually submit evidence of insurability (a health questionnaire or exam), and the insurer can decline or rate that late entrant.

Coverage Amount Formulas

Ohio permits several non-discriminatory ways to set the death benefit, so long as the method applies uniformly within each class:

• Flat amount — every member in a class gets the same face (e.g., $50,000).
• Salary multiple — 1x, 2x, or 3x annual earnings, often rounded.
• Earnings schedule / position — graded amounts by salary band or job grade.
• Length of service — increasing amounts at service milestones.

Many plans set a guaranteed-issue limit — the maximum face an employee can get with no evidence. Amounts above that ceiling require underwriting even at initial enrollment. A high earner whose 3x-salary benefit exceeds the guaranteed-issue limit gets the guaranteed amount automatically and must prove insurability for the excess.

Certificates of Coverage

The master policy stays with the policyholder. Ohio requires the insurer to deliver a certificate of coverage to each insured member, which is the employee's proof of, and summary of, their benefits. A certificate must disclose:

• The schedule of benefits and the amount of life insurance on that member
• Any required employee premium contribution
• How to name and change a beneficiary
• How to file a claim and the proof-of-loss timeframe
• The conversion and continuation rights available at termination

A member who never received a certificate may have a complaint basis, and failure to deliver certificates is a market-conduct violation reviewable by ODI.

Conversion Privilege (31 Days)

When a member leaves the group, group coverage ordinarily ends — but Ohio guarantees a conversion privilege. The departing insured may convert to an individual policy without proving insurability.

Worked example: Dana, age 45, carries $80,000 of group term life and resigns June 1. She has until July 2 (31 days) to apply for an individual whole life policy of up to $80,000 at the insurer's age-45 rate — no medical exam. If she misses the window, she loses the guaranteed right and must apply as a normal underwritten applicant.

Conversion When the Master Policy Terminates

A subtle rule: if coverage ends because the employer's entire group policy is terminated (not just the one employee leaving), conversion is available only to those covered for at least 5 years, and the convertible amount may be reduced by the amount of any group life the person becomes eligible for within 31 days under a replacement plan.

Continuation Beyond Conversion

Group life may continue (rather than convert) during protected leaves:

• Family and Medical Leave Act (FMLA) and USERRA military leave
• Total disability — many policies waive premium and continue death benefit
• A short layoff or leave of absence, if the policy provides

Exam Tip: The number to memorize is 31 days for life conversion (contrast with health continuation timelines). Conversion gives permanent coverage at attained-age rates with no evidence of insurability.

Conversion vs. Portability

Do not confuse conversion with portability. Conversion moves the insured into an individual permanent policy issued by the same insurer; the premium is recalculated at the new attained age, typically rising sharply. Portability, when a plan offers it, lets the departing member keep a term certificate at group rates by paying the insurer directly. Conversion is a guaranteed statutory right in Ohio; portability is an optional plan feature. On the exam, if the question stresses "no evidence of insurability" and "individual permanent policy," the answer is conversion.

Beneficiary and Settlement Rules

Each insured member names a beneficiary for their certificate and may change it at any time unless an irrevocable designation was made. If no beneficiary survives, proceeds follow the certificate's order of payment — commonly the insured's estate. Group life proceeds, like individual life proceeds, are paid in a lump sum unless a settlement option (interest, fixed-period, fixed-amount, or life-income) is elected.

Producers servicing group plans must be able to walk a beneficiary through filing proof of loss and explain that an accelerated death benefit (for a terminal illness) may be available on the group certificate if the plan includes that rider.