Question 59

The insured pays a higher rate for the group policy.

Group life insurance typically offers lower rates because the risk is spread across a larger pool of insured individuals, making it more cost-effective. Therefore, the statement that the insured pays a higher rate for the group policy is incorrect.

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

This statement is correct as group life insurance premiums are generally calculated based on the collective risk profile of the group rather than individual risk factors. Insurers assess the overall risk associated with the entire group, which influences the pricing.

B) Evidence of insurability is not required

This statement is accurate since, in group life insurance, individuals typically do not need to provide evidence of insurability. Coverage is often guaranteed for members of the group, which simplifies the enrollment process and makes it more accessible.

C) Individual underwriting is not required

This option is correct as well. One of the defining characteristics of group life insurance is that it does not require individual underwriting, allowing all eligible members of the group to obtain coverage without individual assessments.

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

This statement is incorrect. Group life insurance is designed to be more affordable, and participants generally benefit from lower rates compared to individual policies due to the shared risk among the group members.

Conclusion

The correct answer is that the insured pays a higher rate for the group policy, which is false, as group life insurance usually provides lower premiums based on collective risk. Options A, B, and C accurately describe features of group life insurance, emphasizing its affordability and simplified enrollment processes. Therefore, D is the only statement that does not apply to group life insurance.