Unit 8 - Group Life Insurance
Group life insurance policies include a probationary period requiring new employees to wait a certain time before they can enroll in the plan. How long is the typical range for these probationary periods?
1 TO 12 MONTHS During the probationary period, employees are not covered. The employer picks the time period, which is typically between 1 and 12 months, and it applies to all eligible employees without discrimination.
Group life insurance policies include a probationary period requiring new employees to wait a certain time before they can enroll in the plan. How long is the typical range for these probationary periods?
1 TO 12 MONTHS During the probationary period, employees are not covered. The employer picks the time period, which is typically between 1 and 12 months and it applies to all eligible employees without discrimination.
Which of the following statements regarding employee eligibility for group benefits is TRUE?
EMPLOYEES MUST BE ACTIVELY AT WORK Employers may establish employment criteria stating that an employee must be actively at work and not on disability leave.
Which of the following statements about a contributory group life insurance plan is CORRECT?
THE EMPLOYEES MUST PAY FOR PART OF THE COST OF THE INSURANCE PROGRAM In a contributory group life insurance plan, employees must pay for part of the cost of the insurance. Payments are usually made through payroll deductions.
Under a group life plan, eligible dependents of an insured employee could include all of the following EXCEPT
THE INSURED's IN-LAWS To be eligible for coverage under a group life plan, the insured's in laws would need to be financially dependent upon the insured.
All of the following types of groups are eligible for group life insurance EXCEPT
A GROUP OF CREDITORS Group credit life insurance is provided for its group of debtors. The other types of groups are employer group plans, multiple employer trusts, labor unions, professional associations and trade associations.
Which of the following is NOT an eligible group to obtain group life insurance?
A NEIGHBORHOOD INVESTMENT CLUB Group life insurance is limited to employer groups, multiple employer trusts, labor unions, group credit life insurance, and association plans.
The premium cost for group insurance is generally based on
EXPERIENCE RATING The premium cost is generally based on experience rating. Claims history and large homogeneous groups help to determine more accurate mortality and morbidity rates.
Which of the following statements regarding group insurance is INCORRECT?
GROUP INSURANCE PLANS SPONSORED BY A BUSINESS ARE SOMETIMES REFERRED TO AS EMPLOYER GROUP PLANS Group insurance plans sponsored by a business are sometimes referred to as employee, not employer, group plans.
Which of the following statements regarding conversion is TRUE?
PREMIUMS ARE BASED ON THE ATTAINED AGE AT CONVERSION When a group policy is converted, the premium will be based on the insured's attained age. Conversion must be with 31 days form the date coverage is lost, must be the same coverage amount, and must be a permanent, not term, policy. Lastly, no proof of insurability is required.
What is one of the advantages of purchasing an individual credit life insurance policy?
THE POLICY CAN CONTINUE IN FORCE EVEN AFTER THE LOAN HAS BEEN PAID OFF An individual credit life insurance policy may remain in force beyond repayment of the loan. Also, the death benefit is allowed to exceed the amount of the debt or loan, whereas with a group policy, the amount of insurance is equal to the amount owed.
All of the following groups are eligible for group insurance EXCEPT
GROUPS THAT EXIST SOLELY IN ORDER TO PURCHASE INSURANCE Eligible groups include employer-sponsored groups, trade or professional associations, and labor unions. Multiple employer trusts (METs), multiple employer welfare arrangements (MEWAs), and lender groups are also eligible. However, a group cannot be formed only for the purpose of buying insurance.
Individual certificates issued to all individuals under an insurance policy must include all of the following information EXCEPT
THE PREMIUM AMOUNT Individual certificates for insureds in a group plan must state what coverage is provided and to whom it is payable, and they must include da detailed conversion provision.
What is one of the advantages of purchasing an individual credit life insurance policy?
THE POLICY CAN CONTINUE INF ORCE EVEN AFTER THE LOAN HAS BEEN PAID OFF An individual credit life insurance policy may remain in force beyond repayment of the loan. Also, the death benefit is allowed to exceed the amount of the debt or loan, whereas with a group policy, the amount of insurance is equal to the amount owed.
Individual certificates issued to all individuals insured under an insurance policy must include all of the following information EXCEPT
THE PREMIUM AMOUNT Individual certificates for insureds in a group plan must state what coverage is provided and to whom it is payable, and they must include a detailed conversion provision.
What is credit life insurance?
POLICIES THAT COVER PAYMENT OF A DEBT IF THE DEBTOR DIES Credit life insurance is insurance on the life of a debtor, written in connection with a loan or other credit transaction for a period of no longer than 10 years.
Which of the following factors is the most pronounced difference between group and individual insurance plans?
UNDERWRITING PROCESS The most pronounced difference between group and individual insurance lies in the underwriting process. In the case of group plans, once the group is approved, all members are eventually included. In the case of an individual policy, a key factor is int insured's ability to qualify for coverage and obtain it at an affordable rate.
Which of the following factors is the most pronounced difference between group and individual insurance plans?
UNDERWRITING PROCESS The most pronounced difference between group and individual insurance lies in the underwriting process. In the case of group plans, once the group is approved, all members are eventually included. In the case of an individual policy, a key factor is the insured's ability to qualify for coverage and obtain it at an affordable rate.