Retirement and Other Insurance Concepts
Why do insurers generally require a higher participation percentage in a contributory group life plan than in a noncontributory plan?
Answer and explanation
Answer: C. In a noncontributory plan every eligible employee is covered automatically, so there is no selection. When employees pay part of the cost, healthier workers may opt out, and a participation minimum limits that adverse selection.Source: NAIC Life Insurance Buyer's Guide — Group life insurance: contributory plans and participation requirements
More retirement and other insurance concepts questions
- Under modern tax law (IRC § 7702), why are endowments that endow prior to age 95 no longer classified or taxed as standard life insurance?
- Under Social Security survivor benefits rules, what is the 'blackout period' for a surviving spouse?
- Under Texas Insurance Code § 1251.001 & § 1131.051, what minimum number of employees must participate in an employer-sponsored noncontributory group life insurance plan?
- Under the human life value approach, what is being measured?
- Under TIC § 1131.051, what minimum participation requirement applies to a CONTRIBUTORY group life insurance plan where employees pay part of the premium?
- What conditions must be met for a Roth IRA distribution of earnings to qualify as 100% tax-free?
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