State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 3/5
Under California law, which condition must be met for a group to be eligible for group life insurance?
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
A valid group must exist for a purpose other than obtaining insurance - for example, an employer-employee group, a union, or an association formed for a business purpose. If a group were formed solely to buy insurance, it would defeat the group underwriting principle that coverage is spread across a natural risk pool. California statutes such as Section 10202.5 define who may be covered within an employer group.
Why the other options are wrong
- B) There is no requirement that eligible groups have fewer than 10 members; group life is offered to larger groups as well.
- C) Group life is generally issued on the group without individual medical exams for each member.
- D) A group created specifically to purchase insurance does not qualify; the natural-purpose test must be satisfied.
Memory hook
A group must exist to do business, not to buy insurance. The insurance rides along; it cannot be the reason for the ride.