Group Life & AnnuitiesQuestion 681 of 716
In a noncontributory group plan, the employer pays the entire premium, so insurers usually require:
a.100% of eligible employees to be covered, to avoid adverse selection
b.At least 75% participation among eligible employees, since some always opt out
c.Individual medical underwriting of each employee before enrollment
d.No minimum participation requirement for the eligible group of employees
Explanation
Because the employer pays it all in a noncontributory plan, insurers require 100% participation, which eliminates adverse selection. Contributory plans, where employees pay part, use a lower threshold like 75%.
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
- A worker's Social Security benefit amount is based on the Primary Insurance Amount (PIA), which is derived from the worker's:
- In group life insurance, the individual employee receives a ________ while the employer holds the ________:
- Group life underwriting typically:
- In a contributory group plan, where employees pay part of the premium, insurers commonly require a minimum participation of about:
- When an employee leaves a job covered by group term life, the conversion privilege usually allows them to convert to:
- A key advantage of the group life conversion privilege is that the departing employee:
Last reviewed: · editorial process
PrepPass team · Verified against California Life & Health Insurance License Exam · How we review
Reviewed by John Zihao Zhang — California-Licensed Life Insurance Agent (CA Dept. of Insurance License #4396095 — verify)