In a group disability insurance arrangement, the master policy is issued to:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Group disability insurance uses a master policy issued to the policyholder, typically the employer, union, or association, that defines the terms of coverage for the entire eligible group. Individual employees and members do not receive separate policies; they receive certificates that summarize their rights under the master contract. This structure means the policyholder manages enrollment and often premium collection, and claims and coverage questions are resolved under the master policy's terms. The certificate holder's rights derive from the master contract.
Why the other options are wrong
- B) Employees are certificate holders under the master policy, not owners of individual policies.
- C) The insurance department regulates the insurer and policy form but is not a party to the contract.
- D) The producer is the sales intermediary, not the policyholder; the policyholder is the entity named in the master policy.
Memory hook
Master policy = one big contract for the employer. Employees hold certificates, not contracts.