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. Replacement
• B. Policy summary
• C. Variable life insurance
• D. Group life insurance

Answer: (D)

Group life insurance uses a single master policy issued to a sponsor, like an employer or association, that covers many people under one contract. The insurer signs one master policy with the sponsor, and each individual receives a certificate of coverage that outlines their own benefits. This setup is different from individual life policies, where each person has a separate contract with the insurer. Because it covers multiple lives under one master agreement, the term you’re looking for is group life insurance. In group plans, underwriting is typically based on the group as a whole, sometimes with less strict underwriting for individuals, and coverage can end if the person leaves the group or if the sponsor stops providing the plan. The other terms don’t describe this structure: replacements refer to swapping policies, a policy summary is just a description of policy features, and variable life is a type of permanent life insurance with an investment component issued to individuals.

Group life insurance uses a single master policy issued to a sponsor, like an employer or association, that covers many people under one contract. The insurer signs one master policy with the sponsor, and each individual receives a certificate of coverage that outlines their own benefits. This setup is different from individual life policies, where each person has a separate contract with the insurer. Because it covers multiple lives under one master agreement, the term you’re looking for is group life insurance.

In group plans, underwriting is typically based on the group as a whole, sometimes with less strict underwriting for individuals, and coverage can end if the person leaves the group or if the sponsor stops providing the plan. The other terms don’t describe this structure: replacements refer to swapping policies, a policy summary is just a description of policy features, and variable life is a type of permanent life insurance with an investment component issued to individuals.