6 - Group Life Insurance

Which requirement must be met for an association to be eligible for a group life plan?

Group was formed for a purpose other than acquiring insurance

Which provision is NOT a requirement in a group life policy?

Accidental An AD&D provision is not required in a group life policy.

What group term life feature permits an individual to depart from the group and continue to be covered without providing evidence of insurability?

Conversion The conversion privilege allows an individual to leave the group term plan and continue his or her insurance without providing evidence of insurability.

Which of the following is an important underwriting principle of group life insurance?

Everyone must be covered in the group. An important underwriting principle of group life is that all or a large percentage of persons in the group must be covered by the insurance.

S, while in the process of converting her group life insurance to an individual policy, dies. What happens to the claim her beneficiary submits?

Full benefits are payable under the Master contract

A person who is insured within a group contract will be given a

certificate

What type of group insurance plan involves employees sharing the cost?

contributory plan

An employee of 20 years recently retired at age 59 1/2. This employee's group life contract can be

converted to an individual permanent policy at an individual rate

When an employee is terminated, which statement about a group term life conversion is true?

The correct answer is "Policy proceeds will be paid if the employee dies during the conversion period". An individual must apply for individual coverage within 31 days after the date of group coverage termination. An individual is covered under the group policy during the conversion period.

Group life insurance policies are generally written as

annually renewable term

If its employees share in the cost of insurance, what type of group life insurance plan would a corporation have?

Contributory

Under a trustee group life policy, who would be eligible for a certificate of coverage?

Employee

An employee with $25,000 group term life coverage was recently fired. This employee's group coverage may be converted to a

$25,000 individual whole life policy

Which of the following statements about noncontributory employee group life insurance is FALSE?

The correct answer is "A minimum number of employees is required to participate". Noncontributory employee group life insurance plans must cover ALL eligible employees at all times.

A noncontributory group term life plan is characterized by

The correct answer is "the entire cost of the plan is paid for by the employer". When an employer provides noncontributory group term life insurance, the employer pays the entire cost of the plan.

Under federal tax laws, what is the tax treatment for an employer providing $50,000 of a contributory group Term Life plan to all its eligible employees?

Portion of the premiums paid for by the employer may be a tax deduction