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Questions and Answers
What is an insurance contract that identifies individuals by relationship to a specific organization?
What is an insurance contract that identifies individuals by relationship to a specific organization?
Group Insurance
Group life insurance is typically issued as?
Group life insurance is typically issued as?
Level term insurance
Any employee insured under a group life insurance plan is normally?
Any employee insured under a group life insurance plan is normally?
Covered with term life insurance
What are premiums for group credit life insurance based on?
What are premiums for group credit life insurance based on?
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Which statement regarding the certificate of insurance is accurate?
Which statement regarding the certificate of insurance is accurate?
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How would an employee in poor health be treated under a group life coverage plan?
How would an employee in poor health be treated under a group life coverage plan?
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Which type of policy can group term insurance normally be converted to?
Which type of policy can group term insurance normally be converted to?
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Why do insurers require a minimum number of employees to participate in a group insurance plan?
Why do insurers require a minimum number of employees to participate in a group insurance plan?
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Which statement about group life insurance is INCORRECT?
Which statement about group life insurance is INCORRECT?
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If an employer pays for accidental death and dismemberment insurance for its employees, the amount paid by the employer is generally?
If an employer pays for accidental death and dismemberment insurance for its employees, the amount paid by the employer is generally?
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Study Notes
Group Life Insurance Overview
- Group insurance contracts identify individuals based on their relationship to a specific organization, rather than personal characteristics.
- Typically issued as level term insurance, providing consistent coverage amounts over time.
Coverage and Premiums
- Employees under a group life insurance plan are generally covered by term life insurance.
- Premiums for group credit life insurance are based on a flat rate, which is independent of the borrower's age.
Insurance Documentation
- A certificate of insurance serves as evidence of an employee's coverage under the group plan.
- Employers provide the same coverage opportunities for all employees, regardless of their health status.
Conversion and Participation
- Group term insurance can typically be converted to an individual permanent life insurance policy when needed.
- Insurers require a minimum number of employees to participate in a group insurance plan to minimize adverse selection risk.
Common Misconceptions
- It is incorrect to state that each participant in a group life insurance plan must provide evidence of insurability; this is not a requirement in many cases.
Tax Implications
- Premiums paid by employers for accidental death and dismemberment insurance are usually tax-deductible for the business, reducing overall operational costs.
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Description
Test your knowledge with these flashcards on Group Life Insurance from Chapter 5. Learn key terms and concepts such as insurance contracts, coverage types, and premium details. This quiz is perfect for anyone studying insurance principles.
