Ch 7: Group Life Insurance

Question 1

What’s an advantage of group life insurance?

Answer 1

Can be offered to a large group with no requirement of proof of insurability on part of its members

Question 2

How are premiums determined in group insurance?

Answer 2

Premiums are based on loss experience. Experience rating is a method of establishing premium for the group based on groups previous claims experience.

Question 3

What’s a disadvantage of group insurance?

Answer 3

There is no individual selection to amount and kind of insurance that is offered.

Question 4

What is a non-contributory policy?

Answer 4

Sponsor pays 100% of the premium and must cover 100% of eligible members.

Question 5

What is a contributory policy?

Answer 5

Based on voluntary participation. Insured will require 75% of eligible members to participate in order to avoid adverse selection.

Question 6

In California, a “true group” consists of?

Answer 6

2+ members

Question 7

In group policies, what must be provided to the insured employees?

Answer 7

Individual certificates of insurance

Question 8

Who is allowed to deduct premiums paid for group insurance as a business expense?

Answer 8

Employers

Question 9

Employers do not have to report the employee paid premium for life insurance as long as the coverage is _________ or less.

Answer 9

$50,000