LOMA 281 Module 4 Questions with Correct Answers

LOMA 281 Module 4 Questions with Correct Answers Group Insurance - Answer-A method of providing life or health insurance coverage for a group of people under one insurance contract. commonly provide: - life insurance, medical expense insurance, disability insurance, and dental insurance coverage 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.