Almost certainly not, because a Madison National term death benefit is almost always a group certificate rather than a policy you own – and that means the useful question is not what it is worth but how many days you have left to act. Madison National Life Insurance Company, Inc., headquartered in Madison, Wisconsin and supervised by the Wisconsin Office of the Commissioner of Insurance, writes employer-sponsored group life, group disability and specialty health for educators and public sector employers. K-12 school districts accounted for roughly 80 percent of its premium in 2020. That is a group benefits business, not an individual retail life business.
Under a group plan the school district, public employer, union or a trust holds the master policy and is the policyowner. You hold a certificate of coverage. There is no ownership interest to assign, so a sale is off the table regardless of the amount. What you do have is a conversion right and, in many plans, a portability right – both exercisable only inside a short window that starts the day coverage ends. Missing that window is how most of this coverage vanishes for nothing, and it happens constantly at retirement.
In This Article
- Certificate or policy: check the title first
- Benefit reductions written into the plan schedule
- The conversion right: what it costs and what you get
- Portability versus conversion, and the 31-day clock
- If you do hold an individual term policy
- Establishing the date, and what to send
- Frequently Asked Questions
Certificate or policy: check the title first
Read the title on the document. Certificate of coverage or certificate of insurance means group. Policy, naming you as owner, means individual. Educators frequently hold both – a district-provided group certificate and a separately purchased individual policy – and treating one as the other wastes weeks.
The distinction has hard consequences. A certificate cannot be sold, because you are not the policyowner and there is nothing to assign; our page on whether group life insurance can be sold explains why buyers cannot work with one. A certificate also generally has no cash value, so there is nothing to surrender. And the plan sponsor can re-bid the coverage to another carrier, amend the benefit schedule, or terminate the plan, usually without your consent.
What a certificate does give you is a set of rights triggered by the end of coverage. Those rights are genuinely valuable – a conversion can produce a permanent individual policy that exists in its own right – but they are perishable. Our page on coverage obtained through a school district or teachers association covers the usual combinations and where each one comes from.
Benefit reductions written into the plan schedule
Group life amounts are often expressed as a multiple of salary, and most plans reduce that amount as the employee ages. A common structure reduces the benefit to 65 percent of the original amount at age 65 and to 50 percent or less at age 70, with further reductions after that, and some plans terminate coverage entirely at retirement or at a stated age. Those reductions are written into the schedule of benefits in the certificate booklet, they happen automatically, and no one calls to tell you.
Read the schedule of benefits and find the reduction table. Then find the provision describing what happens at retirement, because plans vary widely: some end coverage on the last day of employment, some continue a reduced amount for retirees indefinitely, some continue it for a fixed number of years, and some make retiree coverage contingent on the employer continuing to pay for it.
Two related provisions are worth locating at the same time. Waiver of premium keeps coverage in force without payment while an employee is totally disabled, subject to filing requirements and deadlines that are easy to miss. Accidental death and dismemberment is usually a separate benefit that pays only for accidental causes and often terminates earlier than the base life benefit. Neither is saleable, but both affect what the family actually has.
The conversion right: what it costs and what you get
Conversion lets you exchange ending group coverage for an individual policy from the carrier without evidence of insurability. That last phrase is why the right matters: an employee whose health has declined can obtain permanent coverage that no underwriter would issue on a fresh application.
Two realities temper it. First, conversion policies are priced at the carrier’s individual conversion rates, which are high – the carrier knows the people most likely to convert are the ones who cannot buy elsewhere, and prices accordingly. A $50,000 conversion at age 66 can carry a premium that surprises people badly. Second, the product you convert into is generally chosen by the carrier, not by you, and is often a whole life contract rather than something with flexible funding. Ask what product the conversion produces and get a quote before deciding.
The upside is that a converted policy is genuinely yours: an individual permanent contract, owned by you, with a cash value and, in principle, a market. If the amount converted is large enough and health has declined, it may later be worth an eligibility review in a way the underlying certificate never could have been. Our glossary entry on group life conversion covers the mechanics and group life after retirement covers the retiree case specifically.
| Portability | Conversion | |
|---|---|---|
| What you get | Continued group term coverage | An individual permanent policy you own |
| Health questions | Often a few | None |
| Cost | Group rates, generally lower | Individual conversion rates, generally high |
| Product choice | Same group term design | Usually chosen by the carrier |
| Ends eventually? | Yes – term, with an age cutoff | No – permanent while premiums are paid |
| Better for | Healthy insureds who may shop elsewhere later | Insureds who could not qualify for new coverage |
| Deadline | Commonly 31 days from the date coverage ends | |
Portability versus conversion, and the 31-day clock
Where a plan offers both, they are different products and the choice matters. Portability continues group term coverage at group rates, usually with a few health questions, usually with a maximum amount and an age cutoff, and always as term coverage that will eventually end. Conversion produces individual permanent coverage at higher cost with no health questions at all. A healthy 58-year-old is often better served by portability or by shopping the open market; an insured with a serious health condition is usually better served by conversion, because no other insurer will offer coverage at any price.
The window is the binding constraint. It is commonly 31 days from the date coverage ends, and in most plans the clock runs whether or not anyone notified you. Some states and some plans extend the period when required notice was not given, but you should not plan on that. If coverage has ended or is ending, call the plan administrator today, ask for the exact termination date in writing, and ask what forms are required. Our side-by-side on portability versus conversion lays out when each wins, and the conversion window at retirement covers the retirement timing specifically. If the coverage ended through a layoff rather than retirement, see employer life insurance after a layoff.
If you do hold an individual term policy
Horace Mann Educators Corporation, based in Springfield, Illinois, completed its acquisition of Madison National Life on January 3, 2022 in a $172.5 million transaction with Independence Holding Company, and Horace Mann Life Insurance Company writes individual life and annuities for educators. So an educator’s file can legitimately contain a Madison National group certificate and a Horace Mann individual policy at the same time. If yours is an individual term policy, the analysis is the standard one.
Individual term has secondary market value only while the conversion privilege is open, because a buyer is acquiring the contractual right to exchange the term contract for permanent coverage at the original risk classification without new evidence of insurability. Conversion privileges typically expire at the earlier of a stated number of policy years or the insured reaching a stated attained age, with 65 and 70 the most common cutoffs, and nothing in a premium notice announces the expiry.
Ask the issuing company in writing for the conversion expiry date as a calendar date, the permanent products available for conversion by name, whether partial conversion is permitted and at what minimum, and whether evidence of insurability is required. That last item decides whether the privilege has value at all. Our pages on reading a term conversion rider and selling a term life policy cover the framework.
Establishing the date, and what to send
Everything on this page hinges on one fact that is often surprisingly hard to pin down: the exact date coverage ended or will end. Payroll records, the benefits office, the carrier and the retirement system frequently disagree by weeks, and the difference decides whether a 31-day window is open or shut. Get it in writing from the plan administrator, not verbally, and ask them to state the specific provision that governs the end of coverage.
Request four documents at once: the certificate booklet, the summary plan description, a written statement of the coverage termination date, and the conversion and portability application forms with their deadlines printed on them. If you are a retiree, also ask whether any retiree continuation benefit applies and for how long. Keep copies of every request and every response, dated.
Once you know whether you hold a certificate or a policy, Pine Lake Life Solutions will read what you have at no cost as an educational free policy review and tell you plainly what deadlines are running and whether anything you own could interest the secondary market. We do not purchase policies and are not licensed in every state, and nothing on this page is legal, tax or investment advice – your own advisor should weigh in before you convert, surrender or transfer anything. Send the certificate booklet or the policy cover page, or call (305) 209-7183.
Frequently Asked Questions
Can I sell the life insurance from my school district?
No. Under a group plan the district, public employer, union or a trust holds the master policy and is the policyowner; you hold a certificate of coverage. There is no ownership interest to assign, so there is nothing a buyer can acquire. What you can do is exercise the conversion or portability right when coverage ends, which is time-limited and far more valuable than most people realize.
How long is the conversion window?
Commonly 31 days from the date coverage ends, and in most plans the clock runs whether or not anyone notified you. Some states and some plans extend the period when required notice was not given, but do not count on it. Ask the plan administrator in writing for the exact coverage termination date and for the conversion form with its deadline printed on it.
Why did my death benefit drop when I turned 65?
Because most group life plans include an age-based reduction schedule written into the certificate. A common structure reduces the benefit to about 65 percent of the original amount at 65 and to 50 percent or less at 70, with further reductions afterward. The reductions are automatic and nobody calls to tell you. Find the schedule of benefits page in the certificate booklet.
Is a converted policy worth more than the certificate was?
In one important sense yes: a converted policy is an individual permanent contract you own outright, with cash value and, in principle, a secondary market, none of which is true of a certificate. The trade-off is price. Conversion policies are issued at individual conversion rates that are deliberately high, and the carrier usually chooses the product. Get a premium quote before committing.
Should I take portability or conversion?
It depends mostly on health. Portability continues group term at group rates with a few health questions and an eventual age cutoff, which suits a healthy insured who may shop the open market later. Conversion produces permanent individual coverage at higher cost with no health questions, which is often the only realistic option for someone who could not qualify for new coverage.
Does Pine Lake buy group certificates?
No, and neither does anyone else, because a certificate holder is not the policyowner. Pine Lake Life Solutions does not purchase policies and is not licensed in every state. We provide a free educational review: send the certificate booklet or policy cover page and we will tell you what you actually hold, what deadlines are running, and whether a converted policy would later merit a market review. Call (305) 209-7183.
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Related Reading
- Can I Sell A Group Life Insurance Policy
- Portability Vs Conversion Group Life
- Retiring Group Life Conversion Window
- Sell Group Life After Retirement
- Teachers Union Life Insurance
- Laid Off Employer Life Insurance
- What Is Group Life Conversion
- What Is A Term Conversion Rider
- Sell Term Life Policy
Pine Lake Life Solutions does not purchase life insurance policies and does not provide legal, tax, or investment advice. Information provided is for educational purposes only. Eligibility for any option, including life settlements, is not guaranteed and depends on individual circumstances, policy terms, underwriting, and market conditions. Consult independent legal, tax, or financial professionals before making decisions regarding a life insurance policy.