In group life insurance, the master contract is issued to:
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
Group life insurance is structured as one master contract issued to the policyholder, usually the employer, union, or association. The insured members are not parties to the master contract; they receive certificates that summarize the coverage, name the insured and the beneficiary, and incorporate the master contract's terms by reference. This two-document structure distinguishes group insurance from individual policies and is fundamental to how group coverage is administered and how certificates are later converted. Because employees have no contract with the insurer, their rights are defined by the master contract and the certificate.
Why the other options are wrong
- B) Employees receive certificates, not individual contracts; the master contract belongs to the employer as policyholder. Each employee receives a certificate that summarizes coverage and names the beneficiary, while the master contract governs the details.
- C) The insurer's home office issues the master contract but does not receive it as the policyholder. Employees are not parties to the master contract and receive only certificates instead of individual policies.
- D) The state insurance department regulates the policy and the insurer but is not a party to the master contract. The home office issues the contract to the policyholder; it does not become the policyholder itself.
Memory hook
Group = one master contract to the employer, certificates for the crowd. The employee's paper is a summary card.