Unit 8: Group Life Insurance

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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


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