CFP

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Group Life Insurance - Review Answers

  1. "A". Annual renewable term is the only term coverage offered in group life insurance policies. Universal life and straight whole life are acceptable forms of permanent coverage for such policies.
  2. "D". Flat benefit or a percentage multiple of one's salary are correct types of formulas.
  3. "C". Plans are tax advantaged so long as they are not discriminatory.
  4. "C". Underwriting is simplified in group life insurance.
  5. "C". Contributory is the correct term.
  6. "A". Annual renewable term is the underlying type of coverage. The question asks about the different types of arrangements, rather than the underlying coverage.
  7. "B". Experience rating based upon the group's prior years' claims experience is how group life insurance is underwritten. Rat-up in age is a form of underwriting for substandard risks; traditional net cost method is a means of policy comparison and standard risk refers to the type of risk that an underwriter might consider in pricing a policy.
Review Questions

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