When an employee converts group term life insurance to an individual policy, what type is it typically?

When an employee converts group term life insurance to an individual policy, it is typically a cash value policy. This type of policy allows the individual to accumulate a cash value over time as they pay premiums, which can be borrowed against or accessed in other ways. The conversion from a group term life insurance policy, which generally provides only a death benefit without any cash value, to an individual cash value policy reflects the individual's need for more comprehensive coverage options that can offer both a death benefit and a savings component.

Unlike a term policy, which provides coverage for a specified period without any cash accumulation, or a fixed premium term policy, which also is limited to a specific term without building cash value, the cash value policy provides long-term benefits to the insured. Additionally, a disability policy focuses on providing income replacement in the event of an inability to work due to illness or injury, which is not related to life insurance conversion. Thus, the nature of the conversion to a cash value policy aligns with the common practice of ensuring that the insured has both protection and a potential financial asset.