Group products

Question 1

Continuation option

Answer 1

A continuation option describes a benefit under an insurance policy whereby the insured can choose, without having to provide evidence of health, to continue the cover provided by the policy under circumstances where it has otherwise ceased.

Such circumstances might apply where the individual has left his/her place of work and is thus no longer covered by an employer-sponsored scheme or where an individual policy has expired.

Question 2

Free cover

Answer 2

This term refers to a benefit level in a group risk arrangement, below which the member is not subject to individual underwriting. Free cover is usually a function of the number if members or the aggregate of benefits provided.

Aka “non-selection limits”.

Question 3

Group business

Answer 3

This is insurance covering a number of individuals under a single policy. The members of the group are linked in some way and there is often a sponsor who facilitates in the payment of premiums and administrative matters. Membership may be compulsory or voluntary.

Question 4

Residence (or location)

Answer 4

This clause limits the location or countries in which the policyholder may be resident to make a valid claim, to ensure effective claims management.

Question 5

Risk equalisation

Answer 5

This applies in some markets whereby the profits or losses on specified policies or risks are pooled and reapportioned among participating insurers so that each shares in the average market experience.

Question 6

Voluntary group

Answer 6

This describes a collection of policyholders for whom membership of a PMI scheme is voluntary. It may include affinity groups or employment groups.