In a group life insurance policy, the master contract is held by the employer, and each insured employee typically receives a:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Group life insurance is issued under a single master contract owned by the employer, and each insured employee receives a certificate of insurance. The certificate describes the employee's coverage, including the amount of insurance and the beneficiary to whom proceeds are payable. The certificate is evidence of coverage, not a separate policy. This structure makes group coverage efficient to administer, and under California law the certificate must set forth the insurance protection to which the employee is entitled and to whom it is payable, so employees always know who their designated beneficiary is.
Why the other options are wrong
- B) Employees do not receive separate individual policy contracts. They receive certificates that summarize their coverage under the employer's master contract, which is the single contract issued by the insurer.
- C) A waiver of premium is a rider or provision that forgives premiums during disability; it is not the document issued to employees describing their group coverage. Certificates are the group-coverage documents.
- D) Group term life insurance generally builds no cash value for employees, so there is no cash surrender value statement issued. The certificate addresses coverage and beneficiary information, not cash value.
Memory hook
Group life: one master contract, a pile of certificates. The certificate names your beneficiary.