Life insurance Chapter 8
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29 Terms
What is group life insurance?
Insurance that covers many people under one contract.
Who usually provides group life insurance?
An employer for employees.
What type of insurance is group life usually?
Annual renewable term insurance.
Who owns the master policy?
The employer or group sponsor.
What does an employee receive instead of a policy?
A certificate of insurance.
What is a master policy?
The main insurance contract between the insurer and group owner.
What is a certificate holder?
The employee/member who has coverage.
What is a contributory plan?
The employee helps pay the premium.
What participation is required for contributory plans?
75% of eligible employees.
What is a noncontributory plan?
The employer pays the entire premium.
What participation is required for noncontributory plans?
100% of eligible employees.
What is a natural group?
A group formed for a reason other than buying insurance.
Give examples of eligible groups.
Employees, unions, trade associations, credit unions, and fraternal organizations.
Who is generally eligible as an employee?
Someone who is full-time and actively working.
How long might a new employee have to wait for group insurance?
Usually 1–6 months.
What is a conversion privilege?
The right to change group term insurance into individual insurance.
What is group credit life insurance?
Insurance that pays off a borrower's debt if they die.
What type of insurance is usually used for credit life?
Decreasing term insurance.
What is blanket life insurance?
Coverage for people exposed to the same hazard.
What is a retired lives reserve?
Money set aside to help provide life insurance after retirement
What is SGLI?
Servicemembers' Group Life Insurance.
What is FSGLI?
Family Servicemembers' Group Life Insurance.
What is VGLI?
Veterans' Group Life Insurance.
What is FEGLI?
Federal Employees Group Life Insurance.
A type of group that has a constitution and bylaws and has been organized for purposes other than obtaining insurance is called a(n)
association or labor group
What does the Group Life underwriting risk selection process help protect insurance companies from?
Adverse selection (Adverse selection is the tendency of less favorable insurance risks to seek or continue insurance to a greater extent than others.)
Which of these factors would an insurer consider when determining whether to accept a group life plan?
Average Age
The coverage, conditions, and limitations in the master policy of a group contract can be found in which document?
Certificate of coverage and benefits
A type of group that has a constitution and bylaws and has been organized for purposes other than obtaining insurance is called a(n)
association or labor group