Unit 8 AI Flashcards
What is a Group life insurance policy?
A policy that covers a group of people, typically employees of a company, with a single contract.
True or False: Group life insurance policies are generally less expensive than individual policies.
True
What is the main advantage of group life insurance policies?
Cost-effectiveness due to economies of scale.
What is the purpose of providing group life insurance to employees?
To provide financial protection to employees’ families in case of the employee’s death.
Fill in the blank: Group life insurance policies are usually offered as a ________ benefit by employers.
benefit
What are some common types of group life insurance policies?
Term life insurance, whole life insurance, and universal life insurance.
What is the role of the employer in a group life insurance policy?
The employer typically pays the premiums and manages the policy.
True or False: Group life insurance policies do not require medical underwriting for individual members.
True
What happens to an employee’s coverage in a group life insurance policy if they leave the company?
Coverage may be converted to an individual policy or terminated.
What is the maximum coverage amount typically offered in a group life insurance policy?
A multiple of the employee’s salary, such as 1-3 times annual salary.
What is the beneficiary of a group life insurance policy?
The person or entity designated to receive the death benefit.
True or False: Group life insurance policies are not portable, meaning coverage ends when an employee leaves the company.
False
What is the purpose of the master policy in a group life insurance policy?
The master policy is the contract between the insurance company and the employer.
What is the difference between contributory and non-contributory group life insurance policies?
Contributory policies require employees to contribute to the premium, while non-contributory policies are fully paid by the employer.
What is the advantage of a contributory group life insurance policy for employees?
Employees have a vested interest in the policy and are more likely to maintain coverage.
What is the advantage of a non-contributory group life insurance policy for employees?
Employees receive coverage at no cost to them.
True or False: Group life insurance policies can be customized to include additional benefits such as accidental death coverage.
True
What is the purpose of the certificate of insurance in a group life insurance policy?
To provide proof of coverage to the insured individual.
Fill in the blank: Group life insurance policies are typically renewed on a ________ basis.
yearly
What is the disadvantage of relying solely on a group life insurance policy for coverage?
Lack of individual customization and potentially limited coverage amounts.
What is the tax treatment of group life insurance premiums paid by the employer?
Generally tax-deductible as a business expense.
What is the tax treatment of group life insurance death benefits received by beneficiaries?
Generally tax-free to the beneficiaries.
True or False: Group life insurance policies are regulated by state insurance departments.
True
What is the purpose of the summary plan description (SPD) in a group life insurance policy?
To provide employees with details about the policy, such as eligibility, coverage amounts, and beneficiary designations.
