Texas Life Agent Practice Exam

If employees are required to contribute to their Group Life insurance coverage, what type of group does this create?

1. Non-Contributory group

2. Contributory group

3. Voluntary group

4. Mandatory group

The correct answer is: Contributory group

When employees are required to contribute to their Group Life insurance coverage, it results in the formation of a contributory group. In this type of arrangement, both the employer and the employees share in the cost of the insurance premiums. Employees must participate and make contributions, which typically allows them to have a say in the coverage options or the level of benefits they wish to secure. The existence of employee contributions distinguishes this group from a non-contributory group, where the employer pays the entire premium and participation is usually automatic without any cost to the employees. In a contributory group, the requirement for employees to contribute emphasizes shared responsibility and investment in the policy. The other options, such as voluntary and mandatory groups, describe different scenarios in the context of insurance coverage but do not specifically refer to the requirement of employee contributions.