Unit 8 - Group Life Insurance

Question 1

Employer Group Plans

Answer 1

A group insurance plan sponsored for employees is sometimes referred to as employee group plans.

Question 2

Multiple Employer Trusts (METs)

Answer 2

A trust made up of multiple small employers in the same or similar industries that form to provide life insurance or other benefits for their employees while gaining tax benefits.

Question 3

Labor Unions

Answer 3

Two or more labor unions may join together to provide group insurance for their collective members.
Labor Unions plans are sponsored under a Taft-Hartley Trust.

Question 4

Association Group Plans

Answer 4

A trade, professional, or other type of association may sponsor a group plan for it’s members.

Question 5

Group Credit Life Insurance

Answer 5

A lender, or creditor, may sponsor a group life insurance plan for its group of debtors.

Question 6

Contributory plans

Answer 6

• Employee pays part or all of the premium

- 75% of eligible employees must enroll

Question 7

Noncontributory plans

Answer 7

• Premium paid by employer

- 100% of eligible employees must enroll

Question 8

For group insurance policies, the covered individual receives proof of coverage in the form of…

Answer 8

a certificate of insurance.

Question 9

Group underwriting

Answer 9

• The underwriter underwrites the group not the individuals insureds.
• Usually no medical questions or exams.

Question 10

Group underwriting considerations may include:

Answer 10

• Stability of the group - does not have excessive employee turnover
• Persistency of the group - groups that change insurers every year may not represent a good risk
• Existance of the group - insurance purchase must be incidental to the group’s formation.

Question 11

Probationary period

Answer 11

Waiting period before eligibility for insurance.

Question 12

Enrollment period

Answer 12

• Follows probationary period - usually 31 days

- No medical questions