Question 30

All eligible employees must be covered by a non-contributory group life plan.

A non-contributory group life plan requires that all eligible employees are enrolled in the insurance coverage without requiring them to contribute financially. This is a fundamental characteristic of such plans, ensuring universal coverage among eligible participants.

A) All eligible employees must be covered by a non-contributory group life plan.

This statement is correct as it accurately reflects the nature of non-contributory plans, which are designed to cover all eligible employees automatically, thereby providing comprehensive coverage without employee contributions.

B) Only a small percentage of eligible employees must want and be willing to pay for coverage under a contributory group life plan.

This statement is incorrect because contributory group life plans are structured such that employees have the option to participate and pay for coverage, but there is no requirement for only a small percentage to want it. In fact, a contributory plan may involve higher participation rates if employees see value in the coverage.

C) Both A and B are correct.

This statement is incorrect as it includes the erroneous assertion in option B. Since B is not correct, C cannot be correct either.

D) Neither A nor B is correct.

This statement is also incorrect because option A is indeed correct. Therefore, it cannot be true that neither statement is correct.

Conclusion

The correct answer is A, as it clearly defines the requirement of non-contributory group life plans to cover all eligible employees. Options B, C, and D fail to accurately represent the principles of group life insurance, particularly the inclusivity mandated by non-contributory plans. Thus, A stands out as the definitive correct statement.