Question 71

The group must be formed for insurance purposes.

Group life policies can be established for various reasons, not solely for insurance purposes. Therefore, it is not true that the group must be formed specifically for this reason.

A) a master policy is issued to the company.

This statement is accurate as a master policy is indeed issued to the employer or entity that establishes the group life insurance, allowing them to manage the coverage for its members.

B) individual insureds receive a certificate of insurance.

This option is also true. In group life insurance, individual members receive a certificate of insurance that serves as proof of their coverage under the master policy.

C) the group must contain a specified number of members.

This statement is correct. Group life insurance policies typically require a minimum number of members to be eligible for coverage, ensuring a sufficient risk pool for the insurer.

D) the group must be formed for insurance purposes.

This statement is incorrect. Groups can be formed for various reasons, such as employment or association, and not exclusively for the purpose of obtaining insurance.

Conclusion

The correct answer is that the group does not need to be formed solely for insurance purposes, as it can arise from other organizational or social structures. Options A, B, and C are all true and accurately reflect the nature of group life policies, thereby emphasizing why D is the only incorrect statement.