Unit 8 - Group Life Insurance

labor unions

An organization formed by workers to strive for better wages and working conditions

noncontributory plan

Employee benefit plan under which the employer bears the full cost of the employees' benefits; must insure 100% of eligible employees.

master contract

Issued to the employer under a group plan; contains all the insuring clauses defining employee benefits. Individual employees participating in the group plan receive individual certificates that outline highlights of the coverage. (Also called master policy.)

enrollment period

Period during which new employees can sign up for coverage under a group insurance plan.

group life insurance

a group coverage frequently offered by companies to their employees and by unions to their members

Employer Group Plans

a group insurance plan sponsored for employees

In a group insurance, the sponsoring group is issued: a. a master policy b. a certificate of insurance c. a certificate of authority d. a policyholder policy

a. a master policy

individual policy

an insurance policy designed specifically for the use of one person (and his or her dependents), not associated with the amenities of a group policy, namely higher premiums (Often called personal insurance)

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: a. the probationary period b. the enrollment period c. the selection period d. the waiting period

b. the enrollment 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 sponsored by: a. an employee group b. a multiple employer trust c. a Taft-Hartley Trust d. a labor group

c. a Taft-Hartley Trust

All of the following statements regarding the conversion privilege are true EXCEPT: a. the conversion must be done within 31 days from the date coverage is lost b. the converted policy must be permanent insurance, not term c. the converted policy must provide the same coverage amount as the individual had under the group policy d. proof of insurability is required

d. proof of insurability is required

certificate of insurance

evidence of coverage under the master policy

contributory plan

Group insurance plan issued to an employer under which both the employer and employees contribute to the cost of the plan. Generally, 75% of the eligible employees must be insured.

General Electricians offers insurance to its employees. About 80% of its eligible employees are currently covered under the plan. This plan is: a. contributory b. noncontributory c. inclusive d. noninclusive

a. contributory

If the employer pays the entire group insurance premium for 100% of its employees, the plan is: a. contributory b. noncontributory c. inclusive d. noninclusive

b. noncontributory

group credit insurance

A form of group insurance issued by insurance companies to creditors to cover the lives of debtors for the amounts of their loans.

Group insurance generally does NOT require: a. stringent medical underwriting b. a short application form c. a minimum level of participation among eligible insureds d. a master policyowner to hold the policy

a. stringent medical underwriting

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: a. the probationary period b. the eligibility period c. the selection period d. the waiting period

a. the probationary period

A typical enrollment period is how many days after the probationary period? a. 30 b. 31 c. 45 d. 60

b. 31

If a group insurance policy is contributory, what percentage of employees must participate? a. 50% b. 75% c. 90% d. 100%

b. 75%

multiple employer trust (MET)

Several small groups of individuals that need life and health insurance but do not qualify for true group insurance band together under state trust laws to purchase insurance at a more favorable rate

probationary period

Specified number of days after an insurance policy's issue date during which coverage is not afforded for sickness. Standard practice for group coverages.

All of the following are correct regarding group insurance EXCEPT: a. the employer is the policyowner b. a group cannot be formed only for the purposes of purchasing insurance c. an individual policy will be provided to all members of the group d. the employer cannot discriminate when determining eligibility of its members

c. an individual policy will be provided to all members of the group

For group insurance policies, the covered individual receives proof of coverage in the form of: a. an insurance policy b. an insurance contract c. a certificate of policy d. a certificate of insurance

d. a certificate of insurance

individual insurance

Policies providing protection to the policyowner, as distinct from group and blanket insurance. (Also called personal insurance)

Jimmy's Print Shop and Bryan's Boutique join together to form a trust to provide insurance to their employees. This type of group is called: a. an employee group b. a multiple employer trust c. a Taft-Hartley Trust d. a labor group

b. a multiple employer trust

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. an introductory period b. a wedding-out period c. a probationary period d. an eligibility period

c. a probationary period

Which of the following characteristics about group credit life insurance is NOT correct? a. the lender is the beneficiary b. it is more expensive than individual credit life insurance c. if debt if paid, the policy is canceled d. coverage can be included as part of the loan transaction

b. it is more expensive than individual credit life insurance

association group plans

a trade, professional, or other type of association may sponsor a group plan for its members

All of the following group insurance eligibility requirements are true EXCEPT: a. employers can determine which classes of employees will be eligible for the plan b. employers can choose which individuals will be covered and which will not be covered c. the 2 most common classifications for employees are full time versus part time and years of service d. probationary periods usually range from 1 to 6 months

b. employers can choose which individuals will be covered and which will not be covered