Ch. 8 - Group Life

The policy provision that permits an employee to change from group life coverage to an individual life policy is called the

a. assignment provision

b. conversion provision

c. certificate provision

d. modification provision

Group life insurance is typically issued as

a. whole life insurance

b. decreasing term insurance

c. increasing term insurance

d. level term insurance

Which statement regarding the certificate of insurance is accurate?

a. it is an insurance contract between the employer and insurer

b. it indicates evidence of an employee's insurance of coverage

c. each certificate of insurance is underwritten on an individual basis

d. it is issued by the employer to the employee

The conversion option for group term insurance may be exercised by an employee

a. at any time while still employed

b. within 2 years of the hire date

c. within 31 days of terminated employment

d. after providing proof of insurability

Any employee insured under a group life insurance plan is normally

a. given a master certificate

b. covered on a noncontributory basis

c. required to show proof of insurability

d. covered with term life insurance

What are premiums for group credit life insurance based on?

a. the age of the borrower at the time debt is incurred

b. the age of the borrower when debt is paid off

c. the average age of the borrower over the life of the debt

d. flat rate unrelated to the borrower's age

If an employer pays for accidental death and dismemberment insurance for its employees, the amount paid by the employer is generally

a. tax deductible to the business

b. non-deductible to the business

c. partially deductible to the business

d. considered taxable income to each employee

What is an insurance contract that identifies individuals by relationship to a specific organization?

a. employer insurance

b. group insurance

c. COBRA plan

d. industrial insurance

Which statement about group life insurance is INCORRECT?

a. Cost can be shared between employer and employee

b. Each participant requires evidence of insurability

c. A minimum number of employees participating may be required

d. Employer is issued a master policy

What minimum percentage of all eligible employees must participate in a group life insurance plan if the premiums are completely paid for by the employer?

a. 0%

b. 50%

c. 75%

d. 100%

Why do insurers require a minimum number of employees participate in a group insurance plan?

a. efficiency is maximized

b. minimize adverse selection

c. profits are maximized

d. claims are minimized

Which type of policy can group term life insurance normally be converted to?

a. an individual renewable policy

b. an individual level term policy

c. an individual permanent life insurance policy

d. a group permanent life insurance policy

An employer has a group life coverage for his employees. How would an employee in poor health be treated in this situation?

a. approved on a graded basis

b. not eligible for insurance in this plan

c. eligible for the same type of coverage as the other employees

d. must pay a rating based on risk