Group Life Insurance Quiz & Flashcards: Key Underwriting Principles

Questions and Answers

Under a trustee group life policy, who would be eligible for a certificate of coverage?

Employee

Group life insurance policies are generally written as?

annually renewable term

Which requirement must be met for an association to be eligible for a group life plan?

Group was formed for a purpose other than acquiring insurance

Which of the following is an important underwriting principle of group life insurance?

Everyone must be covered in the group. Signup and view all the answers

Which of the following statements about noncontributory employee group life insurance is FALSE?

A minimum number of employees is required to participate. Signup and view all the answers

What type of group insurance plan involves employees sharing the cost?

contributory plan Signup and view all the answers

When an employee is terminated, which statement about a group term life conversion is true?

Policy proceeds will be paid if the employee dies during the conversion period. Signup and view all the answers

If its employees share in the cost of insurance, what type of group life insurance plan would a corporation have?

Contributory Signup and view all the answers

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?

Portion of the premiums paid for by the employer may be a tax deduction Signup and view all the answers

What group term life feature permits an individual to depart from the group and continue to be covered without providing evidence of insurability?

Conversion Signup and view all the answers

A person who is insured within a group contract will be given a?

certificate Signup and view all the answers

Which provision is NOT a requirement in a group life policy?

Accidental Signup and view all the answers

An employee of 20 years recently retired at age 59 1/2. This employee's group life contract can be?

converted to an individual permanent policy at an individual rate Signup and view all the answers

An employee with $25,000 group term life coverage was recently fired. This employee's group coverage may be converted to a?

$25,000 individual whole life policy Signup and view all the answers

A noncontributory group term life plan is characterized by?

the entire cost of the plan is paid for by the employer Signup and view all the answers

S, while in the process of converting her group life insurance to an individual policy, dies. What happens to the claim her beneficiary submits?

Full benefits are payable under the Master contract Signup and view all the answers

Study Notes

Group Life Insurance Key Concepts

Eligibility for a certificate of coverage under a trustee group life policy extends to employees.
Group life insurance policies are typically structured as annually renewable term policies.

Association Group Life Plans

To qualify for a group life plan, an association must be formed for purposes other than purchasing insurance.

Underwriting Principles

A crucial underwriting principle is that a significant percentage of individuals within the group must be insured.

Noncontributory vs. Contributory Plans

Noncontributory employee group life insurance requires coverage for all eligible employees; a minimum participation number is NOT necessary.
A contributory plan involves shared costs between employees and the employer.

Group Term Life Coverage

Upon termination, if an employee dies during the conversion period, policy proceeds will be paid. Individuals can apply for individual coverage within 31 days post-termination.

Tax Treatment of Group Life Insurance

Employers providing $50,000 in coverage under a contributory plan may deduct a portion of premiums paid for tax purposes.

Conversion Privilege

The conversion feature allows individuals to leave group term insurance and obtain separate coverage without needing to provide evidence of insurability.
An employee can convert their group life contract to an individual permanent policy when retiring.

Policy Provisions

Group life policies are not required to include accidental death and dismemberment (AD&D) provisions.
Upon termination, a group coverage of $25,000 may be converted to an individual whole life policy valued at the same amount.

Claim Process

If an individual dies while converting group life insurance, full benefits will be payable to the beneficiary under the Master contract.

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Description

Test your knowledge with these flashcards on group life insurance. The flashcards cover essential concepts such as eligibility, policy types, and requirements for associations. Perfect for insurance students or professionals looking to reinforce their understanding of group life insurance.

Group Life Insurance Flashcards