Group Life Insurance - Review Answers
- "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.
- "D". Flat benefit or a percentage multiple of one's salary are correct types of formulas.
- "C". Plans are tax advantaged so long as they are not discriminatory.
- "C". Underwriting is simplified in group life insurance.
- "C". Contributory is the correct term.
- "A". Annual renewable term is the underlying type of coverage. The question asks about the different types of arrangements, rather than the underlying coverage.
- "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.