Question 44

Employer groups are eligible for group life insurance.

Group life insurance is typically offered to employer groups, as these groups meet specific criteria set by insurance providers regarding the number of members and the nature of the relationship among them.

A) Neighbourhood group

Neighbourhood groups are generally not eligible for group life insurance as they do not typically demonstrate a formal relationship or a consistent structure that insurers require for underwriting purposes. Insurers prefer groups that have a defined purpose or affiliation, such as employment.

B) Employer group

Employer groups are eligible for group life insurance because they consist of employees who share a common employment relationship. This structured affiliation allows insurers to assess risk more effectively and provide coverage to the entire group, making it the correct choice.

C) Friends group

Friends groups lack the formal ties and defined structure necessary for group life insurance eligibility. Insurers often require a more formal association, such as employment or membership in an organization, which is not typically present in a casual friends group.

D) Family group

While family groups may seem like a close-knit association, they usually do not qualify for group life insurance due to the absence of a formalized relationship recognized by insurers. Group life insurance is designed for larger, more structured groups rather than informal family connections.

Conclusion

The correct answer is B, as employer groups provide the structured affiliation necessary for group life insurance eligibility. All other options fail to meet the criteria set by insurers, as they lack the formal and defined relationships that are essential for such coverage.