Life Insurance Policies
How do contributory and noncontributory group plans differ in participation requirements?
Answer and explanation
Answer: B. Where the employer pays the whole cost, all eligible members must be covered, which removes selection; where members contribute, a high percentage such as seventy-five is required for the same reason. Requiring nothing would open the plan to adverse selection.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, contributory and noncontributory
More life insurance policies questions
- An owner aged fifty takes a loan against a single premium whole life policy. What is the tax result?
- An owner converts a term policy and may choose attained age or original age. What is the trade?
- An owner of continuous premium whole life wants to pay less in a difficult year. What does the contract permit?
- An owner wishes to move the value of an old policy into a single premium whole life contract. What preserves the deferral?
- At what premium is the individual policy issued on conversion from group cover?
- Does a level premium term policy accumulate cash value the owner may reach?
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