Question 47

Generally, all of the following apply to group life insurance EXCEPT the insured pays a higher rate for the group policy.

In group life insurance, insured individuals typically benefit from lower rates because the risk is spread across a larger group. Therefore, the statement about the insured paying a higher rate is not accurate.

A) the insured pays a higher rate for the group policy.

This statement is incorrect as group life insurance is generally less expensive for individuals compared to individual policies. The collective nature of group insurance allows for lower premiums due to the pooling of risk among many members.

B) it is priced according to the risk factors of the group.

This option is correct. Group life insurance premiums are determined based on the overall risk profile of the group rather than on individual health assessments. This helps to ensure that rates remain affordable for all members.

C) individual underwriting is not required.

This statement is true for group life insurance. Unlike individual policies where underwriting assesses personal health risks, group policies often do not require individual underwriting, making it easier for members to obtain coverage.

D) evidence of insurability is not required.

This is correct as well, as group life insurance typically does not require evidence of insurability for members to enroll. This reduces barriers to obtaining coverage, as individuals can be included without providing health documentation.

Conclusion

The correct answer is A, as it misrepresents the nature of group life insurance, which usually offers lower rates to its members. Options B, C, and D accurately reflect characteristics of group life insurance, reinforcing the idea that members benefit from collective risk management.