Unit 8: Group Life Insurance
A company has 1,200 eligible employees for its group life insurance program, and the company pays the total premium. How many employees must be insured to initiate the plan?
1,200 employees
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?
1-12 months
If a group insurance policy is noncontributory, what percentage of employees must participate?
100%
If an employer pays the entire premium for a group life insurance policy, the policy must insure what percentage of eligible employees?
100%
What minimum percentage of eligible employees must be insured under a noncontributory group life policy?
100%
Whois most likely to offer group credit life insurance?
a car dealership
For group insurance policies, the covered individual receives proof of leverage in the form of
a certificate of insurance
When an employer establishes a group insurance plan, what evidence of insurance may each participating employee receive?
a certificate of insurance
A group plan in which the employer and employee both contribute to the premium and requires a minimum of 75% participation is referred to as
a contributory plan
All of the following groups would be eligible for group insurance EXCEPT
a family of 10
Jimmy's Print Shop and Emily's Boutique join together to form a trust to provide insurance to their employees. This type of group is called
a multiple employer trust
Sam's graphic design and Amy's floral vision join together to form a trust to provide insurance to their employees. This type of group is called
a multiple employer trust
Which of the following statements regarding group insurance is INCORRECT?
after a debtor has been paying a debt, the most a creditor may collect on credit life insurance is the original loan amount
If an employer pays all the premiums for a group life insurance policy, the policy must insure
all eligible employeees
A car manufacturer offers insurance to all of its employees. This type of group is called
an employer group
A group life insurance plan participant who has been covered under the plan for 4 years terminates employment on October 1. October 22 she dies without having made a decision whether to convert her group coverage to an individual policy. What action will the insurer take?
assume that the deceased employee would have elected the conversion option and pay the death benefit without regard for the deceased employee's insurability prior to death
Which of the following is NOT a common underwriting consideration in group insurance?
average age of the group
One reason a plan may require employees to sign up within 31 days after the probationary period is to
avoid adverse selection
Which of the following statements regarding group credit life insurance is NOT correct?
depending on the loan amount, evidence of insurability may be required
All of the following are characteristics of group life insurance EXCEPT
each insured in the group receives a policy
Individual certificates issued to all individuals insured under an insurance policy must include all of the following information EXCEPT
the premium amount
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
Savanah starts her new job on January 1. She is NOT eligible for coverage until March 1. The period between her start date and eligibility date is known as
the probationary period
All of the following are likely to appear on a group participant's certificate of insurance EXCEPT
a physicians's address
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
All of the following are correct regarding group insurance EXCEPT
an individual policy will be provided to all members of the group
General Electricians offers insurance to its employees. About 80% of its eligible employees are currently covered under the plan. This plan is
contributory
Group life insurance plans in which employees contribute to the overall premium are called
contributory
Which of the following types of life insurance covers the life of a debtor in connection with a specific loan?
credit life
What is credit life insurance?
insurance that covers a debtor's life and will help provide funds to pay off a loan if the debtor dies before the loan is repaid
Which of the following characteristics about group credit life insurance is NOT correct?
it is more expensive than individual credit life insurance
Shiyuan, while in the process of converting her group life insurance to an individual policy, dies. What happens to the claim her beneficiary submits?
it is paid under the old group plan
Which of the following statements regarding group life insurance is FALSE?
the converted policy must be a term insurance policy, not permanent insurance
A typical enrollment period is how many days after the probationary period?
31
The period of time a new employee has to wait before she may enroll in a group life insurance plan is called
a probationary period
The individuals who are insured under a group life contract are given which of the following as evidence of their coverage?
certificates of insurance
The premium cost for group insurance is generally based on
experience rating
Which of the following statements about the group conversion option is NOT true?
the option guarantees the member that coverage will continue for 60 days
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 sponsored by
a Taft-Hartley Trust
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
A master policy is issued to the sponsoring group and the policyholder is
the employer
Typically, a contract for group life insurance is issued to
the employer
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 period
If a group life insurance plan is contributory, what minimum percentage of eligible employees must participate?
75%
If a group life insurance policy is contributory, what percentage of employees must participate?
75%
Jerome's Jazz and Juice Bar offers group life insurance on a contributory basis. How many of Jerome's employees must participate in the plan?
75%
If an employer group plan in contributory, most states require that at least
75% of the eligible employees participate
If a company has 1000 employees who are eligible for a contributory group heath insurance program, how many would be required to participate?
750
When credit life insurance is required to secure a debt, the debtor must
have the option of getting required coverage from existing coverage or form any authorized insurer
Which of the following is least likely to sponsor group credit life insurance plans?
local grocery stores
A trust that is formed by a group of smaller employers in the same or similar industries is known as a
MET
Madison, who is 27, is interested in purchasing a car from the local dealership. What kind of insurance might be included when she finances her car?
credit life insurance
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
With group credit life insurance plans, the amount of insurance is
equal to the debt owed
Which of the following statements about group and individual life insurance is CORRECT?
group plans involve experience rating, while individual policies require individual underwriting and evidence of insurability
All of the following groups are eligible for group insurance EXCEPT
groups that exist solely in order to purchase insurance
Group insurance requires all of the following EXCEPT
medical exams
Under a group life insurance plan, each employee has the right to
name their beneficiary
All of the following statements regarding the conversion privilege are true EXCEPT
proof of insurability is required
In group insurance, the sponsoring group is issued
a master policy
Which of the following is the LEAST likely to appear on a group insurance application?
medical questions
Which of the following statements with regard to group term life insurance is CORRECT?
most group term policies contain a conversion privilege, allowing insureds to convert the coverage to an individual plan if they leave the group
If the employer pays the entire group insurance premium for 100% of its employees, the plan is
noncontributory
In group insurance plans, if the plan is noncontributory, the employer
pays the entire premium
A converted policy must be
permanent insurance
What is credit life insurance?
policies that cover payment of a debt if the debtor dies
Which of the following statements regarding conversion is TRUE?
premiums are based on the attained age at conversion
In which of the following situations might Gabriela be eligible for group credit insurance?
she recently purchased a car and financed it through the dealership
When indebtedness is discharged before the schedules maturity date, credit insurance is
terminated and a refund is paid to the insured
In writing group insurance, insurance companies use all of the following underwriting criteria EXCEPT
the individuals' medical histories
Under a group life plan, eligible dependents of an insured employee could include all of the following EXCEPT
the insured's in-laws
A certificate holder will lose their coverage under a group life insurance plan due to any of the following EXCEPT
the insurer increases the premium
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
Which of the following factors is the most pronounced difference between group and individual insurance plans?
underwriting process
Generally speaking, how many days does a certificate holder have to convert to an individual policy?
31
What does an individual employee receive for evidence of her insurance coverage in a group policy?
certificate of insurance
Eligible employees of a contributory or noncontributory plan have how many days after the probationary period to sign up for their group insurance?
31 days
All of the following types of groups are eligible for group life insurance EXCEPT
a group of creditors
Which of the following groups is least likely to be eligible for coverage through a group heath plan?
a group of neighbors who wish to insure themselves and their families
Which of the following is NOT an eligible group to obtain group life insurance?
a neighborhood investment club
Which of the following statements regarding both individual credit life insurance and group credit life insurance is NOT correct?
both policies are typically medically underwritten
Which of the following statements regarding group coverage is NOT correct?
both the policy owner and the insured receive a copy of the master policy
Which of the following statements regarding employee eligibility for group benefits is TRUE?
employees must actively at work
Which of the following statements comparing group and individual life insurance is NOT true?
individual insurance is generally available at lower rates than group insurance
With group life insurance policies, standard provisions that apply to employees who join during the open enrollment period typically include all of the following EXCEPT
providing proof of insurability
Group insurance generally does NOT require
stringent medical underwriting
