Group Life Insurance

Question 1

An employee with $25,000 group term life coverage was recently fired. This employee's group coverage may be converted to a:
<> $25,000 individual whole life policy 
<> $25,000 individual term life policy
<> $25,000 modified whole life policy 
<> $125,000 individual whole life policy

Answer 1

$25,000 individual whole life policy

~ In this situation, a terminated employee may covert to a $25,000 individual whole life policy

Question 2

Under a trustee group life policy, who would be eligible for a certificate of coverage?
<> Labor union
<> Employer
<> Corporation
<> Employee

Answer 2

Employee

~An employee would be a certificate holder under a trustee group life policy

Question 3

An employee of 20 years recently retired at age 59 1/2. This employee’s group life contract can be:
<> converted to an individual permanent policy at a group rate
<> continued at a group rate
<> continued at an individual rate
<> converted to an individual permanent policy at an individual rate

Answer 3

converted to an individual permanent policy at an individual rate
~ In this situation, the insured can convert to a permanent policy at the individual rates.

Question 4

Group life insurance policies are generally written as:
<> increasing term 
<> annually renewable term
<> group whole life
<> a term rider

Answer 4

annually renewable term

~ Group life insurance policies are generally written as annually renewable term.

Question 5

What type of group insurance plan involves employees sharing the cost?
<> non-contributory plan
<> non-qualified plan
<> qualified plan
<> contributory plan

Answer 5

contributory plan

~ Employees share the cost of group insurance with employer in a contributory plan

Question 6

When an employee is terminated, which statement about a group term life conversion is true?
<> Policy proceeds will be paid if the employee dies during the conversion period
<> Employee must convert group term life coverage into an individual term life policy
<> Policy proceeds will NOT be paid if the employee dies during the conversion period
<> Employees must provide evidence of insurability for conversion

Answer 6

Policy proceeds will be paid if the employee dies during the conversion period
~ An individual must apply for individual permanent coverage termination. An individual is covered under the group policy during the conversion period.

Question 7

Which requirement must be met for an association to be eligible for a group life plan?
<> Group was formed for a purpose other than acquiring insurance
<> Group must have at least 10 members
<> Group must establish a President
<> Group was formed for the purpose of acquiring insurance

Answer 7

Group was formed for a purpose other than acquiring insurance
~ Group life insurance can be formed just as long as they are formed for a reason other than to purchase insurance

Question 8

Which of the following is an important underwriting principle of group life insurance?
<> The group must be formed for the purpose of getting affordable insurance
<> Everyone must be covered in the group
<> Employer must pay for the entire premium
<> Physical examinations are required

Answer 8

Everyone must be covered in the group
~ An important underwriting principle of group life is that all or large percentage of persons in the group must be converted by the insurance

Question 9

Which is NOT a requirement in a group life policy?
<> Conversion
<> Accidental 
<> Incontestable period 
<> Grace period

Answer 9

Accidental

~ An AD&D proviso is not required in a group life policy

Question 10

What group term life feature permits an individual to depart from the group and continue to be converted without providing evidence of insurability?
<> Owner's rights 
<> Nonforfeiture options
<> Entire contract
<> Conversion

Answer 10

Conversion
~ The conversion privilege allows an individual to leave the group term plan and continue his or her insurance without providing evidence of insurability