Rhode Island Life Insurance Practice Exam

What does a group life insurance policy generally provide to eligible employees?

1. Higher premium rates

2. Guaranteed coverage without underwriting

3. Personalized policy features

4. Individual policy ownership

The correct answer is: Guaranteed coverage without underwriting

A group life insurance policy is designed to provide insurance coverage to a group of people, typically employees of a company, under a single master policy. One of the key benefits of this type of policy is that it often offers guaranteed coverage without the need for individual underwriting. This means that eligible employees can receive coverage without having to go through the medical examination or risk assessment processes that are typically required for individual life insurance policies. This feature is particularly advantageous because it allows employees to obtain life insurance coverage easily and quickly, regardless of their health status, making it accessible to a broader range of people. It helps ensure that all eligible employees can benefit from the policy, increasing the collective security of the group. This is especially valuable for employees who might otherwise find it difficult to secure individual life insurance due to pre-existing health conditions or other factors that could lead to higher costs or denial of coverage. In contrast, the other choices present characteristics that do not typically apply to group life insurance. For example, group policies generally do not have personalized features or individual ownership because they are designed around a collective, rather than individual, assessment and policy structure.