Life Insurance Policies
Why do the rules on eligible sponsors insist that the group exist for a purpose other than insurance?
Answer and explanation
Answer: C. A group gathered for the purpose of buying cover selects itself, drawing those who most expect to claim, which defeats group underwriting. Size, licensing and the mechanics of pricing are not the underlying concern.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, sponsor and adverse selection
More life insurance policies questions
- What happens to the cost of an increasing term benefit as the insured ages and the coverage amount rises?
- What happens under a whole life policy if the insured lives to the contract's maturity age?
- What is distinctive about the cash value of a single premium whole life policy in its first year?
- What is experience rating in a group life plan?
- What is limited about a limited payment whole life policy?
- What is the difference between the guaranteed and the current premium shown for a level premium term policy?
621 New York questions like this one.
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