Group Life Insurance

Question 1

In group life insurance, what is used to insure lives of several people?

Answer 1

Master policy

Question 2

In group LI, policyholder chooses…

Answer 2

Baseline for the death benefit

Question 3

Group members get a certificate of insurance and…

Answer 3

Might be able to increase the death benefit

Question 4

Group members choose their own…

Answer 4

Beneficiaries and can’t be the employer

Question 5

Premium might be paid by employer with or without…

Answer 5

Employee payroll deduction

Question 6

Group LI has little to no medical underwriting but…

Answer 6

Possible age-based pricing

Question 7

Group LI has potential cost savings for the insurer due to…

Answer 7

Low underwriting/admin costs

Question 8

Group LI is often offered in…

Answer 8

Guaranteed renewable, 1 year terms

Question 9

Insurer can rises prices but…

Answer 9

Cannot cancel based on increased risk

Question 10

Insurer can require that at least…

Answer 10

A minimum number of employees participate

Question 11

For non-contributory plans, participation must be…

Answer 11

Mandatory for all similarly situated employees

Question 12

For contributory plans, participation must be…

Answer 12

Voluntary but often at least 75%

Question 13

Group LI is often marketed to groups of…

Answer 13

10 or more

Question 14

Participants must be what to enroll?

Answer 14

Actively at work- 30 hrs/wk, not on disability

Question 15

Enrolling when hired or during annual open enrollment typically means…

Answer 15

No medical underwriting or exam

Question 16

Some plans might offer higher or lower benefits to seniors or high-ranking employees but…

Answer 16

May have anti-discrimination laws and tax consequences

Question 17

Group life death benefits are often…

Answer 17

Flat dollar amount or a multiple of someone’s salary

Question 18

Death benefit coverage bought entirely by the employer is often capped at…

Answer 18

$50k for tax reasons

Question 19

Group LI is term and usually…

Answer 19

Convertible, not portable

Question 20

Employees who leave can convert to perm LI at…

Answer 20

Higher cost but regardless of health

Question 21

Employees typically have how long to convert after leaving?

Answer 21

1 month

Question 22

Is death during the conversion window covered?

Answer 22

Yes

Question 23

Businesses can deduct LI premiums as business expenses if…

Answer 23

They aren’t the beneficiary

Question 24

Group plans offering more than $50k of insurance might create…

Answer 24

Unintended tax consequences of employees