PSI Life Exam Practice Test

In general, which of the following is NOT applicable to group life insurance?

1. Evidence of insurability is required

2. Covers a group rather than individuals

3. Typically involves lower premiums

4. Offers lifetime protection for all members

The correct answer is: Evidence of insurability is required

Group life insurance is designed to cover a group of people, usually under a single policy, rather than individual policies for each member. This approach allows for broader risk pooling, which is why it typically involves lower premiums compared to individual life insurance policies. The collective nature of this insurance often means that not every member has to provide evidence of insurability, especially when certain conditions are met, such as a guaranteed issue policy for new employees during an enrollment period. While group life insurance can provide a range of coverage options, it generally does not offer lifetime protection for all members. Instead, coverage usually ends when an individual leaves the group, such as an employer, which means that the policy is often temporary and dependent on the member's status within the group. Therefore, the correct understanding highlights that requiring evidence of insurability is not a standard practice in group life insurance, especially for those who enroll during specified periods or meet other criteria defined by the plan. This reinforces the accessibility and affordability features typically associated with group policies.