Questions and Answers
Group life insurance policies are generally written as?
When an employee is terminated, which statement about a group term life conversion is true?
If its employees share in the cost of insurance, what type of group life insurance plan would a corporation have?
Which provision is NOT a requirement in a group life policy?
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Which requirement must be met for an association to be eligible for a group life plan?
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Under a trustee group life policy, who would be eligible for a certificate of coverage?
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An employee of 20 years recently retired at age 59 1/2. This employee's group life contract can be?
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A noncontributory group term life plan is characterized by?
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Which of the following is an important underwriting principle of group life insurance?
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S, while in the process of converting her group life insurance to an individual policy, dies. What happens to the claim her beneficiary submits?
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Which of the following statements about noncontributory employee group life insurance is FALSE?
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What group term life feature permits an individual to depart from the group and continue to be covered without providing evidence of insurability?
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Under federal tax laws, what is the tax treatment for an employer providing $50,000 of a contributory group term life plan to all its eligible employees?
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What type of group insurance plan involves employees sharing the cost?
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Study Notes
Group Life Insurance Basics
- Group life insurance policies are commonly structured as annually renewable term insurance.
Group Term Life Conversion
- Upon employee termination, if death occurs during the 31-day conversion period, policy proceeds will be paid, allowing conversion to an individual policy.
Contribution Types
- A contributory group life insurance plan involves employees sharing the cost of the insurance.
Required Provisions
- An accidental provision is not mandatory in group life policies, unlike conversion, grace period, or incontestable period.
Association Eligibility
- For an association to qualify for a group life plan, it must be formed for a purpose other than acquiring insurance.
Certificate of Coverage
- Under trustee group life policies, employees are eligible for a certificate of coverage.
Conversion After Retirement
- Retired employees can convert their group life coverage to an individual permanent policy at an individual rate.
Noncontributory Plan Characteristics
- A noncontributory group term life plan is entirely funded by the employer without employee contribution.
Underwriting Principles
- A key underwriting principle in group life insurance is that everyone must be covered within the group.
Claims During Conversion
- If an individual dies while converting group life insurance to an individual policy, full benefits are payable under the master contract.
Noncontributory Plan Misconceptions
- It is false that a minimum number of employees is required to participate in noncontributory group life insurance plans.
Conversion Feature
- The conversion feature allows individuals to maintain coverage without needing to prove insurability upon leaving the group.
Tax Treatment for Employers
- Under federal tax laws, employers can claim a tax deduction for a portion of the premiums paid for contributory group term life plans over $50,000.
Cost Sharing Plans
- A contributory plan is characterized by employees sharing the cost of insurance coverage.
Coverage Conversion Specifics
- An employee with $25,000 in group term life coverage may convert to an equivalent individual policy, possibly increasing their coverage.
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