In a group life insurance plan, the contract of insurance is:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Group life insurance is provided under a master policy issued to the policyholder, typically the employer, which is the contracting party. Each covered employee does not receive a policy but rather a certificate of insurance describing the coverage, benefits, and any limitations. The certificate is evidence of coverage, while the master contract governs the rights of the parties. This master-policy-and-certificate structure is a defining feature that distinguishes group insurance from individual coverage, and it explains why eligibility, conversion, and continuation rules are handled at the group level.
Why the other options are wrong
- B) Group insurance is not a bundle of individual policies; a single master policy covers the entire group. Employees receive certificates as evidence of coverage rather than individual policies of their own.
- C) Insurance contracts must be in writing, so no valid oral group coverage exists under the law. The master policy is the written embodiment of the group contract and governs all certificate holders.
- D) The employer is the policyowner, not the beneficiary; each employee names their own beneficiary for the coverage. The employer's ownership does not include the right to claim death proceeds.
Memory hook
Group life: one master policy at headquarters, certificates in every employee's drawer.