33-20-1209. Conversion on termination of eligibility. (1) The group life insurance policy shall contain a provision that if the insurance or any portion of it on a person covered under the policy ceases because of termination of employment or of membership in the class or classes eligible for coverage under the policy, such person shall be entitled to have issued to him by the insurer, without evidence of insurability, an individual policy of life insurance, provided application for the individual policy shall be made and the first premium paid to the insurer within 31 days after such termination, and provided further that:
     (a) the individual policy shall, at the option of such person, be on any one of the forms, including but not limited to term insurance, if the group policy so provides, then customarily issued by the insurer at the age and for the amount applied for and shall offer benefits at least equal to those under the group coverage;
     (b) the individual policy shall, at the option of the insured, be in an amount not in excess of the amount of life insurance which ceases because of such termination, less the amount of any life insurance for which such person is insured under any other group policy within 31 days after such termination, provided that any amount of insurance which shall have matured on or before the date of such termination as an endowment payable to the person insured, whether in one sum or in installments or in the form of an annuity, shall not, for the purposes of this provision, be included in the amount which is considered to cease because of such termination; and
     (c) the premium on the individual policy shall be at the insurer's then customary rate applicable to the form and amount of the individual policy, to the class of risk to which such person then belongs, and to his age attained on the effective date of the individual policy.
     (2) With the consent of the employer, a person covered under a group life insurance policy issued to an employer or to the trustees of a fund established by an employer under 33-20-1101 may continue his coverage under the group policy during his employment notwithstanding reduction of his regular work schedule to less than the minimum number of hours required for eligibility for membership. The premium charged for the continued coverage shall be equal to that charged other members of the group. Such person's coverage under the group will cease if he subsequently becomes eligible for coverage under another group policy because of employment elsewhere.

     History: En. Sec. 345, Ch. 286, L. 1959; R.C.M. 1947, 40-3918; amd. Sec. 1, Ch. 579, L. 1981.