Chapter 8 (Summary): Group Life Insurance

These flashcards cover essential concepts related to group life insurance, comparing it to individual insurance and explaining important terms and conditions.

Group insurance

Provides both life and health insurance policies.

Certificate holders

Employees under a group insurance policy.

Contract holders

Employers who take out a group insurance policy.

Evidence of insurability

Not required in group life insurance.

Non-contributory plan

An insurance plan where the employer pays the entire cost.

Contributory plan

An insurance plan where the employees share the cost with the employer.

Probationary period

The time between initial employment and eligibility for group insurance, typically one to six months.

Enrollment period

The time frame in which new members can enroll in group life insurance, usually 31 days.

Conversion privilege

The right to convert group insurance to individual coverage upon termination of employment.

Rating classification system

Used to categorize risks in group life insurance.

Preferred risk

A low risk category that offers lower premiums.

Standard risk

An average risk category with no extra ratings or restrictions.

Substandard risk

A high risk category that incurs higher premiums.

Declined risk

Not insurable due to high potential loss risk to the insurer.

Group Credit Life Insurance

Insurance set up by banks to pay off a creditor's outstanding debts.

Master policy

A single insurance policy issued to a group.

Group underwriting

Insurance underwriting that applies to all members of a group.

Individual underwriting

Insurance underwriting that assesses each individual separately.

Cost comparison

Group life insurance is generally less expensive with fewer restrictions compared to individual insurance.