Life Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 1/5
In a noncontributory group life insurance plan, participation is required of:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
In a noncontributory group life plan, the employer pays the entire premium, so ALL eligible employees must be covered. Because the employer funds 100% of the cost, adverse selection is avoided and no participation minimum is needed; every eligible employee is automatically insured. In a contributory plan, where employees share the premium cost, a minimum participation percentage (commonly 75%) is required to keep the risk pool balanced.
Why the other options are wrong
- B) The 75% participation standard applies to contributory plans where employees pay part of the cost, not to fully employer-paid plans.
- C) Noncontributory coverage is automatic for all eligible employees; employees do not have to request it.
- D) Group life eligibility is based on defined classes of employees, but noncontributory coverage must include all eligible employees in the class, not just management.
Memory hook
Noncontributory = employer pays all, everyone eligible is automatically in. Contributory = employees chip in, and a crowd must join too.