Massachusetts Life Producer Practice Exam

How are employees in poor health treated in group life coverage scenarios?

1. Excluded from coverage

2. Given a higher premium

3. Eligible for the same type of coverage as other employees

4. Only eligible for basic coverage

The correct answer is: Eligible for the same type of coverage as other employees

In group life insurance scenarios, employees in poor health are typically eligible for the same type of coverage as other employees. This principle is foundational to group insurance policies, which are designed to ensure that all members of a group can obtain coverage without being subjected to individual underwriting assessments that might occur in individual insurance policies. The nature of group policies allows for the sharing of risk among all members, which means that the overall health status of individual members does not directly affect the availability of coverage for the group as a whole. Essentially, the collective risk of the group neutralizes the impact of individual health issues, allowing those in poor health to still access the same coverage benefits as their healthier counterparts. In contrast, other approaches, such as excluding individuals altogether, raising premiums based on health status, or limiting coverage to basic options, are not standard practices in group life insurance. This inclusivity is a key feature of group coverage, reinforcing the idea of financial protection for all employees without discrimination due to health conditions.