In group life insurance, the contract between the insurer and the employer is known as the:

Why A is correct

Group life insurance is issued under a single master policy (master contract) between the insurer and the group policyholder, usually the employer. Each insured employee does not receive a separate individual policy; instead, the employee receives a certificate of coverage that summarizes the master policy's terms, the amount of coverage, and the beneficiary rights. The certificate is evidence of coverage under the master contract.

Why the other options are wrong

• B) The certificate belongs to the employee; the employer holds the master policy, and individual policies are not issued to each employee.
• C) A rider is an amendment to a policy, not the document summarizing an employee's group coverage.
• D) Group life is issued on the group basis without individual policies being delivered to employees.

Memory hook

One master policy for the crowd, certificates for the individuals. The group contract is the big book, the certificate is the summary card.

Why A is correct

In group life insurance, the employer or group sponsor holds the master policy issued by the insurer, and each covered employee receives a certificate of insurance that evidences and describes the employee's coverage. The certificate summarizes the benefits, terms, and conditions of coverage under the group plan and often notes the conversion privilege. The employee is not a direct party to the master contract and does not receive an individually underwritten policy. This master-policy-and-certificate structure is the fundamental distinction between group and individual insurance.

Why the other options are wrong

• B) The master policy is held by the group policyholder, usually the employer. Individual employees do not own or receive a copy of the master policy; they receive certificates of insurance.
• C) Group life does not use temporary binders. The employee’s coverage is evidenced by a certificate of insurance issued under the master policy.
• D) Coverage is provided under the group master policy. It is not provided through a separate individually issued and individually underwritten policy for each employee.

Memory hook

Group = one master contract, many certificates. Employer holds the big book; each worker holds a card.