Under California group life insurance rules (CIC §10202.5 et seq.), which of the following would qualify as an eligible group?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
California law (CIC §10202.5) defines eligible groups for group life insurance around a genuine common relationship, chiefly employer-employee: officers, managers, and employees of a corporation, including those of subsidiaries and affiliated entities, and classes of former employees such as retirees, plus sole proprietors and partners actively engaged in the business. The law expressly does not permit persons lacking that employment relationship to become insured under the group policy. Random individuals, groups formed solely to buy insurance, and relatives lack the common bond the statute requires.
Why the other options are wrong
- B) Eligible groups must share a defined common employment or organizational relationship. Ten unrelated individuals with different employers lack the common bond the statute requires.
- C) Forming a group solely to obtain insurance is a classic disqualifier. Group insurance requires a pre-existing common relationship independent of the insurance purchase.
- D) Relatives without an employment or business relationship do not qualify under the group life statute, which is built around the employer-employee relationship.
Memory hook
The group must be real — born of the workplace, not of the insurance sales pitch.