Texas Life Agent Practice Exam

Which statement is NOT true about Group Life insurance?

1. The employer is the beneficiary

2. It is typically less expensive than individual coverage

3. Coverage can extend to employees' dependents

4. It often has a guaranteed issue feature

The correct answer is: The employer is the beneficiary

In the context of Group Life insurance, the statement regarding the employer being the beneficiary is not accurate. Typically, in a Group Life insurance policy, the insured employees are the individuals covered under the policy, and, in most cases, the beneficiaries are designated by the employees themselves, often including family members rather than the employer. This structure allows employees to ensure that their chosen beneficiaries, such as spouses or children, receive the death benefit payout, rather than the employer benefiting from the policy. The other statements reflect typical characteristics of Group Life insurance. It is generally less expensive than individual coverage because the risk is spread over a larger group of insured individuals, which contributes to lower premiums. Additionally, Group Life policies often provide coverage options that extend to employees' dependents, allowing family members to have coverage under the same plan. Lastly, many Group Life policies feature a guaranteed issue provision, which means that employees can enroll in the insurance without the need for medical underwriting, making it accessible for individuals who might otherwise face barriers to getting individual coverage due to health issues.