State RegulationsCO specificDifficulty 1/5
A labor union in Aurora sponsors group life coverage for its members. Under Colorado group life law, which party is the insured under the coverage?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under Colorado group life statutes (C.R.S. § 10-7-201 to 207), the sponsoring employer or organization holds the master policy as policyholder, but the people actually insured are the individual members of the group. Each member is covered on his or her own life, receives a certificate, and may designate a beneficiary. Distinguishing the policyholder from the insureds is a recurring source of confusion on group life questions.
Why the other options are wrong
- A) The union is the policyholder, not the insured; the coverage runs on the individual members' lives.
- B) The insurer is the party issuing the coverage; it can never be the insured party under the policy.
- C) Group life insures the individual members' lives; the sponsoring entity merely holds the master policy.
Memory hook
The group holds the paper, the people carry the risk.