PSI Life Exam Practice Test

Which statement is NOT a characteristic of Group Life insurance plans?

1. Individual underwriting

2. Lower premiums than individual plans

3. Covers a group of individuals under one policy

4. Guaranteed acceptance into the group

The correct answer is: Individual underwriting

Group Life insurance plans are designed to cover multiple individuals under a single contract, providing various benefits that distinguish them from individual plans. One notable characteristic is that they often have lower premiums than individual policies, which are attributed to the pooled risk of insuring a group rather than individual assessments. Group Life insurance usually guarantees acceptance into the plan, meaning that individuals cannot be denied coverage based on medical history, provided they meet specific criteria to be part of the group. Individual underwriting, however, is not a characteristic of Group Life plans. Instead, the underwriting process is typically more simplified or even non-existent in group policies, as the focus is on the group as a whole rather than assessing individual risks in detail. This allows for broader coverage without the need for health assessments for each member, making Group Life insurance accessible and affordable for many people.