In a group life insurance plan, the master contract is issued to:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
In group life insurance, the insurer issues a single master contract to the policyholder, typically the employer, union, or association. Each covered employee receives a certificate summarizing the coverage, including the amount, the beneficiary designation, and the conversion rights. The employees are not parties to the master contract itself, so their rights come from the certificate and the group plan. The employer is responsible for administering the plan, paying premiums, and providing certificates. This two-tier structure of master contract and certificates is the defining feature of group life insurance.
Why the other options are wrong
- Individual employees receive certificates of coverage under the master contract; they do not receive or own the master policy.
- The insurer issues the master contract to the policyholder; the insurer's home office is the issuer, not the recipient.
- Beneficiaries are not parties to the master contract; their interests arise from the certificate and the policyowner's designation.
Memory hook
One master contract for the group, certificates for the crowd.