Question 71

The group must be formed for insurance purposes.

Group life policies can be established for various reasons, not strictly for insurance purposes. Therefore, it is not necessary for the group to be formed solely for the intent of obtaining insurance coverage.

A) a master policy is issued to the company.

This statement is true as group life insurance policies typically involve a master policy that is issued to the employer or organization, which covers all participating members. This structure is fundamental to the group insurance model.

B) individual insureds receive a certificate of insurance.

This statement is also true. In group life insurance, while a master policy is held by the group, individual members receive a certificate of insurance as proof of coverage, detailing their benefits under the policy.

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

This statement is correct as well. Group life insurance policies generally require a minimum number of members to be valid, ensuring a sufficiently large risk pool to manage the insurance effectively.

D) the group must be formed for insurance purposes.

This statement is incorrect. A group can exist for a variety of reasons, such as employment or membership in an organization, and does not need to be established solely to acquire insurance. This flexibility allows a wider range of groups to qualify for coverage.

Conclusion

The correct answer is D, as it highlights a misconception regarding the formation of groups for insurance purposes. Options A, B, and C accurately describe essential characteristics of group life insurance policies, while D incorrectly limits the purpose for which groups can be formed. Thus, all other options remain valid, confirming D as the only incorrect statement.