Group Life Insurance

Question 1

What is Group Life Insurance?

Answer 1

A type of life insurance that covers a group of people, often provided by an employer or an organization.

Question 2

True or False: Group Life Insurance typically requires individual medical underwriting for each member.

Answer 2

False

Question 3

Fill in the blank: Group Life Insurance often provides coverage for _____ members of an organization.

Answer 3

all eligible

Question 4

Which of the following is a common feature of Group Life Insurance? A) Individual premiums B) Coverage for dependents C) Guaranteed issue

Answer 4

C) Guaranteed issue

Question 5

What is a typical benefit of Group Life Insurance for employers?

Answer 5

It can enhance employee benefits and aid in employee retention.

Question 6

What is the general rule for eligibility to sponsor a group insurance plan?

Answer 6

The group must have been formed for a purpose other than for obtaining group insurance for its members.

Question 7

Group insurance eligibility is limited to the following groups:

Answer 7

*Employer Group Plan, Multiple Employer Trusts (METs), Labor Unions, professional/trade association group plans, and Group Credit Life Insurance

also Single Employer sponsored

Question 8

Issued to the sponsoring group and the applicant is policyowner or policyholder. This could be an employer or labor union.

Answer 8

master policy

Question 9

certificate of insurance

Answer 9

Issued to individual employee or member. Provides evidence of coverage under master policy.

summary of benefits, certificate number, and beneficiary’s name

Question 10

What percentage of employees must participate in a contributory group insurance policy?

Answer 10

75%

Question 11

True or False: It is possible for individuals with poor health to receive group insurance benefits.

Answer 11

True) Group policies have no medical questions on application as no medical underwriting is required.

Question 12

group underwriting considerations

‘stability of group’

Answer 12

group does not have excessive employee turnover

Question 13

group underwriting considerations

‘persistency of group’

Answer 13

groups that change insurers every year may not represent a good risk

Question 14

group underwriting considerations

‘existence of group’

Answer 14

insurance purchase must be incidental to group’s existence

Question 15

Full-time, part-time, and years of service are

Answer 15

most often used to determine which employees may join plan.

classes of employees

Question 16

Ranges from 1-12 months. Time period chosen by employer. Must apply to all eligible employees without discrimination.

Answer 16

probationary period

Question 17

Helps prevent adverse selection in group policy. Eligible employees must enroll in group policy within this 31-day time frame. If missed, insurer may ask medical questions or require medical exam.

Answer 17

enrollment period

open enrollment

Question 18

True or False) Dependent coverage is typically a smaller amount than the employee or certificate holder.

Answer 18

True

Question 19

The right to convert group policy coverage to an individual policy if certificate holder leaves employer; the plan is discontinued, or insurer does not renew policy.

Answer 19

Conversion Priviledge

Question 20

What is required to convert group policy coverage to individual coverage?

Answer 20

1. must be done within 31 days from date coverage is lost
2. MUST be converted to PERMANENT insurance, not term
3. same coverage amount as provided under group policy
4. premium based on attained age at time of conversion
5. no proof of insurability is required