Chapter 6 Flashcards
The conversion privilege under a group life plan allows an employee to convert to what?
An individual plan upon employment termination.
The coverage, conditions, and limitation in the master policy of a group contract can be found in which document?
Certificate of coverage and benefits.
Converting a group plan to permanent life insurance involves what?
The conversion being applied within 1 month of termination.
Under a group life policy, the insurer will issue an individual ______ to the policyowner for delivery to each person insured.
Certificate
A non-contributory health insurance plan helps the insurer avoid what?
Adverse selection
What is a contributory plan?
An employee group insurance plan in which employees share the cost; requires 75% participation
What is a non-contributory plan?
A plan in which the employee pays the entire cost of the plan; 100% participation
Define “certificate of insurance”.
What employees obtain as evidence of their coverage as they do not own the policy. They are certificate holders.
A type of group that has a constitution and bylaws and has been organized for purposes other than obtaining insurance is called a what?
Association or labor group
Group life insurance can be obtained by what groups?
- Single-employee groups
- multiple-employee groups
- labor unions
- trade associations
- credit/debit groups
- fraternal organizations
- trustee gruops
What are the requirements of an employee in order to be able to participate in group insurance?
- must be full-time and actively working
- Set up for automatic payroll deduction if contributory
- Past 1-6 month probationary period
- Enrolled within 31 days of enrollment period, or they need to provide proof of insurance
When are premiums for group life insurance tax-deductible?
If employer pays the premium, it can deduct them as a business expense.
How long is the conversion period?
-31 days
What is Franchise life insurance?
A form of group life insurance in which participants are employees of common employer/members of a common association or society.
What is Group Credit Life Insurance?
Insurance set up by banks, finance companies, etc. so if insured dies before a loan is repaid the benefits will be used to settle the balance.
