Group Life Insurance Flashcards
noncontributory
employee benefit plan where the employer bears the full cost of the employee’s benefits
in most states, the plan must insure 100% of eligible employees
contributory
group ins. plan issued to employer under which both employer and employees contribute to the cost of the plan.
generally 75% of the eligible employees must be insured in most states
certificate of insurance
doc. issued by an insurance co./broker that is used to verify the existence of insurance.
typically (with group) the employer is the PO and maintains a master policy. Employees typically receive a cert. of insurance in lieu of a policy
master policy
issued to employer under a group plan. defining employee benefits.
conversion privilege
allows policy owner, before original insurance po. expires, to elect to have a new policy issued that will continue the ins. coverage.
conversion may be effected at attained age or at original age.
common privilege for term life ins. and all group insurance. insured does not have to prove insurabilty when converting
franchise insurance
life/health insurance plan for covering groups of persons w/ individual policies uniform in provisions, altho perhaps diff. in benefits.
generally written for groups too small to qualify for regular group coverage.
may be called wholesale insurance when the policy is life insurance.
credit policies
designed to help insured pay off loan in event they are disabled due to an accident/sickness or in the event they die.
if insured becomes disabled, the policy provides for monthly benefit payments = to monthly loan payments due.
if insured dies, policy will pay a lump sum to the creditor to pay off the loan.
creditor policies cannot exceed amount of loan that is the only amt the creditor has insurable interest in.
blanket health policies
issued to cover a group who may be exposed to the same risks, but the composition of the group (individuals in group) are constantly changing.
may be issued to an airline or a bus company to cover its passengers or to a school to cover its students.
No certs of coverage are issed in blanket health plan
how are most group insurance policies written
as an annually renewable term policy
what is more expensive? individual life/group life
group policies have lower admin charges than individual cuz only a single billing per employer per month.
what are the features that separate group insurance from individual insurance
- individual doesnt have to provide evidence of insurability
- individual doesn’t own the contract
- issued as level term term insurance, provides fixed amt of coverage throughout term of the contract
in group insurance, employees are called what and employers are called what?
employees are called certificate holders
employers are called contract holders
