Unit 8 AI

Question 1

What is a Group life insurance policy?

Answer 1

A policy that covers a group of people, typically employees of a company, with a single contract.

Question 2

True or False: Group life insurance policies are generally less expensive than individual policies.

Answer 2

True

Question 3

What is the main advantage of group life insurance policies?

Answer 3

Cost-effectiveness due to economies of scale.

Question 4

What is the purpose of providing group life insurance to employees?

Answer 4

To provide financial protection to employees’ families in case of the employee’s death.

Question 5

Fill in the blank: Group life insurance policies are usually offered as a ________ benefit by employers.

Answer 5

benefit

Question 6

What are some common types of group life insurance policies?

Answer 6

Term life insurance, whole life insurance, and universal life insurance.

Question 7

What is the role of the employer in a group life insurance policy?

Answer 7

The employer typically pays the premiums and manages the policy.

Question 8

True or False: Group life insurance policies do not require medical underwriting for individual members.

Answer 8

True

Question 9

What happens to an employee’s coverage in a group life insurance policy if they leave the company?

Answer 9

Coverage may be converted to an individual policy or terminated.

Question 10

What is the maximum coverage amount typically offered in a group life insurance policy?

Answer 10

A multiple of the employee’s salary, such as 1-3 times annual salary.

Question 11

What is the beneficiary of a group life insurance policy?

Answer 11

The person or entity designated to receive the death benefit.

Question 12

True or False: Group life insurance policies are not portable, meaning coverage ends when an employee leaves the company.

Answer 12

False

Question 13

What is the purpose of the master policy in a group life insurance policy?

Answer 13

The master policy is the contract between the insurance company and the employer.

Question 14

What is the difference between contributory and non-contributory group life insurance policies?

Answer 14

Contributory policies require employees to contribute to the premium, while non-contributory policies are fully paid by the employer.

Question 15

What is the advantage of a contributory group life insurance policy for employees?

Answer 15

Employees have a vested interest in the policy and are more likely to maintain coverage.

Question 16

What is the advantage of a non-contributory group life insurance policy for employees?

Answer 16

Employees receive coverage at no cost to them.

Question 17

True or False: Group life insurance policies can be customized to include additional benefits such as accidental death coverage.

Answer 17

True

Question 18

What is the purpose of the certificate of insurance in a group life insurance policy?

Answer 18

To provide proof of coverage to the insured individual.

Question 19

Fill in the blank: Group life insurance policies are typically renewed on a ________ basis.

Answer 19

yearly

Question 20

What is the disadvantage of relying solely on a group life insurance policy for coverage?

Answer 20

Lack of individual customization and potentially limited coverage amounts.

Question 21

What is the tax treatment of group life insurance premiums paid by the employer?

Answer 21

Generally tax-deductible as a business expense.

Question 22

What is the tax treatment of group life insurance death benefits received by beneficiaries?

Answer 22

Generally tax-free to the beneficiaries.

Question 23

True or False: Group life insurance policies are regulated by state insurance departments.

Answer 23

True

Question 24

What is the purpose of the summary plan description (SPD) in a group life insurance policy?

Answer 24

To provide employees with details about the policy, such as eligibility, coverage amounts, and beneficiary designations.