Which term is used for a master policy covering multiple lives under a single contract?

Which term is used for a master policy covering multiple lives under a single contract?

• A. Fixed life insurance
• B. Group life insurance
• C. Policy summary
• D. Replacement

Answer: (B)

Group life insurance is designed for a group of people under one master policy issued to a sponsor, like an employer. Instead of each person having a separate policy, the employer holds the master policy and provides individual certificates of coverage to participants. This setup covers multiple lives under a single contract, which is what the question is asking about. The master policy outlines the overall terms, while the certificates represent each member’s specific coverage. The other terms don’t fit this concept. A policy summary is just a disclosure document, not a contract covering multiple lives. Replacement refers to swapping one policy for another, not the structure of a policy that covers many people. And fixed life insurance isn’t a standard term for this arrangement.

Group life insurance is designed for a group of people under one master policy issued to a sponsor, like an employer. Instead of each person having a separate policy, the employer holds the master policy and provides individual certificates of coverage to participants. This setup covers multiple lives under a single contract, which is what the question is asking about. The master policy outlines the overall terms, while the certificates represent each member’s specific coverage.

The other terms don’t fit this concept. A policy summary is just a disclosure document, not a contract covering multiple lives. Replacement refers to swapping one policy for another, not the structure of a policy that covers many people. And fixed life insurance isn’t a standard term for this arrangement.