Retirement and Other Insurance Concepts
Why do insurers ordinarily require higher participation in a noncontributory group plan than in a contributory one?
Answer and explanation
Answer: A. Where the employer pays the entire premium there is no cost to the employee and no reason to decline, so noncontributory plans ordinarily cover all eligible employees, which removes the risk of only less healthy employees enrolling. Benefit size and coverage type do not drive the rule, and contributory plans carry their own participation expectations.Source: Pearson VUE — Georgia Insurance Examination Content Outlines #121102 — Outline page S2, Participation
More retirement and other insurance concepts questions
- Which of these is a cash need rather than a continuing income need in a personal needs analysis?
- Who makes contributions to a Simplified Employee Pension (SEP) IRA plan, and how are they taxed?
- Why do insurers generally require a higher participation percentage in a contributory group life plan than in a noncontributory plan?
- Why is a conversion privilege most valuable to a person whose health has declined?
- A client considering a life settlement asks what he should weigh before selling. Which point is most important to raise?
- A client wants survivors to receive income for thirty years and does not mind if the fund is exhausted at the end. Which approach fits?
592 Georgia questions like this one.
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