Group Life Insurance

Question 1

What is:

• written on more than one life
• usually written for employee-employer groups
• most often written as an annual renewable term policy

Answer 1

Group Life Insurance

Question 2

• An employee group plan in which employees share the cost

- at least 75% of all employees participate

Answer 2

Contributory

Question 3

Noncontributory

Answer 3

• employees do NOT share in the cost

- 100% of employees eligible

Question 4

Features of Group Insurance

• the individual does not have to provide _______of______- group underwriting is involved
• are not issued as individual policies- __________ are issued instead
• ________ due to lower administrative, operational, and selling expenses associated with group plans
• flow of _______: entering and exiting under the policy as they join and leave the group

Answer 4

1. evidence of insurability
2. master contracts
3. low cost
4. insureds

Question 5

What are employees and employers called under group life?

Answer 5

• Employees are called – certificate holders

* Employers are called- contract holders

Question 6

Is a group eligible if it’s formed to purchase life insurance?

Answer 6

no

Question 7

What is the minimum # of members

required for group life insurance?

Answer 7

There is no minimum

Question 8

Eligibility of Group Members – (employees)

Answer 8

• Employee must be full time and actively working
• If contributory, employees must approve of automatic payroll deduction
• New employee probationary period is usually 1 to 6 months
• The employee has 31 days during the enrollment period to sign up, otherwise they may need to provide evidence of insurability

Question 9

Life insurance is normally offered as a guaranteed annual renewable term policy

Answer 9

Group Term Life

Question 10

Group Whole Life

Answer 10

Offers permanent protection for insured members under the group.

Question 11

Dependent Coverage

Answer 11

-coverage cannot exceed 50% of the insured member’s coverage.

Question 12

Determining eligibility

Answer 12

Must benefit at least 70% of all employees. At least 85% of all participating employees must not be key employees.

Question 13

Premiums for group life insurance

Answer 13

• paid by the employee = not tax deductible
• employer pays = deductible premiums as a business expense
• Proceeds in a lump-sum = tax-free
• Proceeds in installments = taxed interest portion

Question 14

Benefit schedules established by employer according to…

Answer 14

• Earnings
• Employment position
• Flat benefit

Question 15

If a member’s coverage is terminated, the member and his dependents may _______ their group coverage to individual whole life coverage, without having to show proof of insurability.

Answer 15

convert

Question 16

An individual must apply for individual coverage within _______ after the date of
group coverage termination and is covered under the group policy during the conversion
period.

Answer 16

31 days

Question 17

Group Policy Termination

Answer 17

• must have been insured for at least 5 years

- permitted to convert to an individual policy, providing coverage up to the face value of the group policy.

Question 18

• common employer(employer operates several small companies)
• members of a common association or society
• each individual will be issued an individual policy
• remain in force as long as premiums are paid and the employee/member maintains their relationship with the sponsor

Answer 18

Franchise Life Insurance

Question 19

Group Credit Life

Answer 19

• Policy benefits are paid to the creditor and used to settle the loan balance
• A decreasing term policy is commonly used
• paid by the borrower

Question 20

Covers groups of people exposed to the same hazard, such as passengers on an airplane. No one is named on the policy and there is not a certificate of coverage given out. Individuals are only covered for the common hazard.

Answer 20

Blanket Life Insurance

Question 21

Group Permanent Life

Answer 21

-Permanent (whole life) plan
-The most common types of permanent
group plans are group ordinary, group paid-up, and group universal life.