In a noncontributory group insurance plan, the employer pays the entire premium, and as a result insurers generally require that:
Explanation
In a noncontributory plan the employer pays the full premium, so insurers typically require that 100 percent of eligible employees participate; universal participation eliminates adverse selection because no one can opt out and leave only higher-risk workers in the plan. It is not limited to volunteers, does not exclude everyone, and is not optional. The 100 percent rule for noncontributory plans contrasts with the lower participation percentages allowed when employees share the cost.
This topic, taught in full in the California Life & Health Insurance Producer Exam guide. California Life & Health Insurance Producer Exam — Complete Study Guide (2026) — PDF + EPUB, $19.99 · 14-day refund →
Practice all 716 questions free — no signup required.
Own the complete California Life & Health Insurance Producer Exam guide — PDF + EPUB, $19.99 →
Related questions on this topic
- To sell variable annuities, a producer must hold:
- The process of converting an annuity's accumulated value into a stream of income payments is called:
- In group insurance, the individual members of the group receive:
- In a contributory group plan, in which employees share in the premium cost, insurers usually require that:
- When an employee leaves a group life insurance plan, the conversion privilege generally allows them to:
- Federal COBRA continuation generally allows an eligible employee who loses group health coverage to:
Last reviewed: · editorial process