Massachusetts State Life Insurance Practice Exam

Which of the following is NOT a feature of group life insurance?

1. Evidence of insurability is required for each member

2. Low administrative and selling costs

3. Master contracts are issued instead of individual policies

4. Coverage is provided even if the member exits the group

The correct answer is: Evidence of insurability is required for each member

Group life insurance typically operates under specific features that differentiate it from individual life insurance policies. One key characteristic of group life insurance is that it usually does not require evidence of insurability for each member. This means that individuals can typically gain coverage without needing to provide health information, which is a significant advantage of group plans. In contrast, the other features mentioned align well with group life insurance. Low administrative and selling costs are a common advantage because the insurance is issued to a group rather than multiple individual applications, leading to efficiency. The issuance of master contracts instead of individual policies allows the insurer to manage the plan more effectively since one agreement covers the collective group. Additionally, coverage for members of a group is usually tied to their status within the group; therefore, while coverage is often maintained while actively part of the group, once a member exits, individualized coverage may not continue unless specified in the policy terms. Understanding these characteristics helps delineate the nature of group life insurance and clarifies why the requirement for evidence of insurability is not a typical feature within this type of coverage.