Question 18

The insured pays a higher rate for the group policy.

Group life insurance typically offers lower premiums compared to individual policies since it is based on the collective risk of a group rather than the individual risk factors. Therefore, it is not accurate to say that the insured pays a higher rate for the group policy.

A) It is priced according to the risk factors of the group.

This statement is true for group life insurance, as the pricing is based on the overall risk of the entire group rather than individual risk factors. This collective approach often results in lower costs for insured members.

B) Evidence of insurability is not required.

This statement is also accurate for group life insurance. Generally, participants in a group policy do not need to provide evidence of insurability, making it easier for individuals to obtain coverage without undergoing medical examinations.

C) Individual underwriting is not required.

This is correct as well, since group life insurance does not typically involve individual underwriting. The coverage is issued to the entire group, allowing members to be insured without the need for individual assessments.

D) The insured pays a higher rate for the group policy.

This statement is incorrect. Group life insurance is generally more affordable because it spreads risk across many individuals, leading to lower premiums than individual policies, which are priced based on personal risk factors.

Conclusion

The correct answer is that the insured pays a higher rate for the group policy, which is false, as group life insurance usually results in lower premiums. The other options accurately describe characteristics of group life insurance, emphasizing its benefits such as no evidence of insurability and no individual underwriting requirements. Thus, option D is definitively the correct answer as it contradicts the fundamental nature of group life insurance.