Chapter 8 Group Life Insurance
Dependent Coverage
-Less insurance than the employee
Group Underwriting
-underwriter underwrites the group not individual insureds -usually no medical questions
A typical enrollment period is how many days after the probationary period?
31
Gianna starts work at a new job on March 1. She is not eligible for insurance coverage until July 1. The period between start date and her eligibility date is
The probationary period
In group insurance, the sponsoring group is issued
a master policy
Kathleen is hired to work at a restaurant. She is not eligible to join the group insurance plan for 30 days. This is an example of
a probationary period
The baker's union and the butcher's union worked together to form a trust to provide insurance to their employees. This type of group is called
a taft-hartley trust
all of the following group insurance eligibility requirements are true EXCEPT
employers can choose which individuals will be covered and which will not be covered.
Which of the following characteristics about group credit life insurance is NOT correct?
it is more expensive than individual credit life insurance
If the employer pays the entire group insurance premium for 100% of its employees, the plan is
noncontributory
Group insurance generally does NOT require
stringent medical underwriting
Adam is eligible for coverage on July 1. He enrolls on July 15. He does not need to show evidence of insurability because he enrolled within
the enrollment periodq
All of the following are correct regarding group insurance EXCEPT
the individual policy will be provided to all members of the group
Types of Groups
-Employer sponsored -multiple employer trust (MET) *trust formed by group of small employers in same or similar industries -labor union *taft hartley trust -professional or trade association -group credit life *lender automatically the beneficiary *insurance cannot exceed the debt
Contributory vs Noncontributory
-contributory *employee pays part or all of the premium *75% of eligible employees must enroll -Noncontributory *premium paid by employer *100% of eligible employees must enroll
Group Eligibility
-determined by the employer *class not individuals -probationary period *waiting period before eligibility for insurance -Enrollment period *follows probationary period- usually 31 days *no medical questions -late enrollment *usually requires medical questions
If a group insurance policy is contributory, what % of employees must participate?
75%
General Electricians offers insurance to its employees. About 80% of its eligible employees are currently covered under the plan. This plan is
contributory
Conversion
-Termination of employment -employer stops plan -31 days *convert to individual permanent policy *cost based upon attained (current) age *no medical questions *death during conversion is covered
Jimmy's Print Shop and Emily's Botique join together to form a trust to provide insurance to their employees. This type of group is called
a multiple employer trust
Employer Sponsored Group Life
-employer is the policyowner -employee receives a certificate of coverage -employee names the beneficiary
Credit Life
-group *sponsored by lender *lender is beneficiary *usually no medical questions *cheaper than individual policy *insurance no greater than debt owed *stops if debt is paid -individual *insured is usually policyowner *assigned to lender *insurance can be greater than the debt *doesn't stop when debt is paid *more expensive than group *may require medical questions
For group insurance policies, the covered individual receives proof of coverage in the form of
a certificate of insurance
all of the following statements regarding the conversion privilege are true EXCEPT
proof of insurability is required