In a group life insurance plan, the master policy is issued to the employer and each covered employee receives a certificate of insurance. Which statement best describes the legal nature of that certificate?

Why C is correct

The master policy is the single insurance contract, held by the group policyholder, usually the employer. The certificate delivered to each employee is evidence of coverage: it summarizes the benefits, beneficiary designation rights, and conversion privileges available under the master policy, but the employee is not a party to the contract itself. This is why the certificate describes coverage rather than creates it.

Why the other options are wrong

• A) The certificate is not a contract; it only evidences the employee's rights under the master policy, which remains the sole agreement between the insurer and the policyholder.
• B) The certificate never becomes the master policy; upon leaving the group, the employee's protection comes from conversion rights described in the certificate, not from taking over the master contract.
• D) Coverage increases generally require evidence of insurability or a qualifying life event under the plan's terms; the certificate merely documents the coverage that exists.

Memory hook

One master policy for the group, a certificate for each member. The contract lives with the employer.