HLLQP - LIFE 06 FC - Group Life Insurance questions with correct answers

The coverage under a group life insurance plan is determined in four different ways based upon an earnings multiple, flat rate, length of service, or some combination thereof. Which method is most common? Answer The most common is the earnings multiple schedule. In this, coverage is equivalent to a multiple of the employee's annual salary. If the overall demographics for a group haves significantly changed, what effect will it likely have on the group premium? Answer The premium will likely be adjusted upon renewal. Demographics are common traits within a group, such as age, gender, smoking status, and so on. The premium on a group life policy is based on the makeup of the group as a whole and does not vary from member to member. However, if the overall demographics have significantly changed, then the insurance company will likely recalculate the premium and adjust it accordingly. Example: If the average age of the group members has decreased from 55 to 35, perhaps due to a rush of early retirements an influx of younger members, the insurer will likely recalculate based on the decreased risk of death and reduce premiums. Under group insurance, who is the insured (also known as the policyholder)? Answer For the purposes of the policy, the actual group itself (usually the employer) is the policyholder, and is also referred to as the "plan sponsor." The employee's are referred to as "members" or "certificate holder." With group insurance, who gets a copy of the ma