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