LOMA 281 UPDATED COMPLETE
QUESTIONS AND ANSWERS PROFESSIONAL
REVIEW SHEET
●● Master group insurance contract
Answer: An insurance contract that insures a number of people.
●● Group insured
Answer: An individual covered by a group insurance policy.
●● Group policyholder
Answer: The person or organization that decides what types of group
insurance coverage to purchase for a specific group, negotiates the terms
of the group insurance contract, and purchases the group insurance
coverage.
●● Which of these people or companies is a party to the group insurance
contract? (Choose all that apply.)
a. Jerome Tate
b. Able Life Insurance
c. The Stetson Company
,Answer: B & C- The Stetson Company and Able Life are the parties to
the contract. Stetson purchased the contract for the benefit of its
employees, and the contract names Stetson as the owner of the group
policy. Jerome is insured by the contract, but he is not a party to it.
●● requirements for a valid contract
Answer: - The parties to the contract must mutually agree to the
contract's terms
- The parties must have contractual capacity
- The parties must exchange legally adequate consideration
-The parties must enter into the contract for a lawful purpose
●● Do you think Able Life and The Stetson Company (the parties to the
group insurance contract) have to meet these same four basic
requirements?
a. Yes, the requirements generally are the same.
b. No, the requirements are different.
Answer: a. The parties must meet the same requirements whether they
are entering into a group contract or an individual contract. However,
one difference between a group insurance contract versus an individual
insurance contract has to do with the lawful purpose requirement.
●● Group insurance contracts have no insurable interest requirement
Answer: Instead, a group contract meets the lawful purpose requirement
because the policyholder buys the coverage for others and is unlikely to
,benefit from the death of the insureds. As a result, the group
policyholder's interest in the contract doesn't present the same risk of
creating a wagering agreement.
●● Jerome is covered by the group life insurance plan issued by Able
Life. This means that Jerome is a group
a. Policyholder
b. Insured
Answer: B. - Jerome is a group insured; The Stetson Company is the
group policyholder.
●● Is Jerome a party to the group insurance contract?
a. Yes
b. No
Answer: B - The parties to the group life insurance contract are The
Stetson Company and Able Life.
●● Was The Stetson Company required to have an insurable interest in
the lives of participating employees?
a. Yes
b. No
Answer: B. - A group policyholder doesn't need an insurable interest in
the lives of the insured group members. This is one difference between
group life and individual life insurance.
, ●● Certificate of insurance
Answer: A document that describes the coverage that the group
insurance contract provides and a group insured's rights under the
contract.
●● The Stetson Company's plan is a noncontributory plan. What does
this mean?
a. Jerome must pay some or all of the premium for his coverage.
b. Stetson pays the entire premium for Jerome's coverage.
c. Jerome and Stetson equally split the premium for Jerome's coverage.
Answer: B. - In a noncontributory plan, the policyholder pays the entire
premium for the coverage.
●● noncontributory plan
Answer: A group insurance plan for which insured group members are
not required to pay any part of the group insurance premium.
●● contributory plan
Answer: A group insurance plan under which insured group members
must pay part or all of the premium for their coverage.
●● The Accent Company, an employer, has a group life insurance plan
that insures the lives of eligible employees. Accent pays the entire
QUESTIONS AND ANSWERS PROFESSIONAL
REVIEW SHEET
●● Master group insurance contract
Answer: An insurance contract that insures a number of people.
●● Group insured
Answer: An individual covered by a group insurance policy.
●● Group policyholder
Answer: The person or organization that decides what types of group
insurance coverage to purchase for a specific group, negotiates the terms
of the group insurance contract, and purchases the group insurance
coverage.
●● Which of these people or companies is a party to the group insurance
contract? (Choose all that apply.)
a. Jerome Tate
b. Able Life Insurance
c. The Stetson Company
,Answer: B & C- The Stetson Company and Able Life are the parties to
the contract. Stetson purchased the contract for the benefit of its
employees, and the contract names Stetson as the owner of the group
policy. Jerome is insured by the contract, but he is not a party to it.
●● requirements for a valid contract
Answer: - The parties to the contract must mutually agree to the
contract's terms
- The parties must have contractual capacity
- The parties must exchange legally adequate consideration
-The parties must enter into the contract for a lawful purpose
●● Do you think Able Life and The Stetson Company (the parties to the
group insurance contract) have to meet these same four basic
requirements?
a. Yes, the requirements generally are the same.
b. No, the requirements are different.
Answer: a. The parties must meet the same requirements whether they
are entering into a group contract or an individual contract. However,
one difference between a group insurance contract versus an individual
insurance contract has to do with the lawful purpose requirement.
●● Group insurance contracts have no insurable interest requirement
Answer: Instead, a group contract meets the lawful purpose requirement
because the policyholder buys the coverage for others and is unlikely to
,benefit from the death of the insureds. As a result, the group
policyholder's interest in the contract doesn't present the same risk of
creating a wagering agreement.
●● Jerome is covered by the group life insurance plan issued by Able
Life. This means that Jerome is a group
a. Policyholder
b. Insured
Answer: B. - Jerome is a group insured; The Stetson Company is the
group policyholder.
●● Is Jerome a party to the group insurance contract?
a. Yes
b. No
Answer: B - The parties to the group life insurance contract are The
Stetson Company and Able Life.
●● Was The Stetson Company required to have an insurable interest in
the lives of participating employees?
a. Yes
b. No
Answer: B. - A group policyholder doesn't need an insurable interest in
the lives of the insured group members. This is one difference between
group life and individual life insurance.
, ●● Certificate of insurance
Answer: A document that describes the coverage that the group
insurance contract provides and a group insured's rights under the
contract.
●● The Stetson Company's plan is a noncontributory plan. What does
this mean?
a. Jerome must pay some or all of the premium for his coverage.
b. Stetson pays the entire premium for Jerome's coverage.
c. Jerome and Stetson equally split the premium for Jerome's coverage.
Answer: B. - In a noncontributory plan, the policyholder pays the entire
premium for the coverage.
●● noncontributory plan
Answer: A group insurance plan for which insured group members are
not required to pay any part of the group insurance premium.
●● contributory plan
Answer: A group insurance plan under which insured group members
must pay part or all of the premium for their coverage.
●● The Accent Company, an employer, has a group life insurance plan
that insures the lives of eligible employees. Accent pays the entire
