The most common group life insurance plans use annual renewable term insurance (ART) as it provides the lowest cost life insurance coverage. However, most conversion options limit the conversion to whole life policies rather than term policies; and, of course, whole life policy premiums are typically higher than term premiums.
The right to renew coverage is on an annual basis without requiring evidence of insurability. Using the ART method, premium costs are typically kept at a lower level as each year the premiums are based on the group's experience during the previous year.
When a group life insurance policy is canceled or has expired, the insurance company must notify each certificate holder (member). This action can be accomplished through the policyholder (employer) by notifying it and requesting that it notify the certificate holders. The policyholder must advise each certificate holder as soon as practicable of the notice of expiration or cancelation.