Which of the following is NOT a characteristic of group life insurance?

Which of the following is NOT a characteristic of group life insurance?

• A. Premiums vary by the age of each individual
• B. Premiums are determined by sex of each individual
• C. Premiums are determined by occupation of each individual
• D. Premiums are fixed for all members regardless of individual characteristics

Answer: (D)

Group life insurance is designed to cover a pool of people, typically through their employment or a common association, and it has certain key characteristics that differentiate it from individual life insurance. The option indicating that premiums are fixed for all members regardless of individual characteristics reflects a fundamental quality of group life insurance. In such plans, premiums are largely based on the collective risk of the entire group rather than individual risk factors. This means that while factors such as age, sex, and occupation may influence group rates, the premiums are established for the group as a whole, rather than tailored to individual members' specific health or personal characteristics. In contrast, premiums that vary based on age, sex, or occupation are typical in individual life insurance. For example, individual premiums might be directly influenced by an applicant's age since older individuals generally have a higher mortality risk. Similarly, premiums may fluctuate based on the individual's sex due to statistical mortality differences between genders, and occupation may also play a role because certain jobs carry more risk than others. Thus, the option stating that premiums are fixed for all members is not a characteristic of typical group life insurance, making it the correct answer in differentiating group policies from individual approaches.

Group life insurance is designed to cover a pool of people, typically through their employment or a common association, and it has certain key characteristics that differentiate it from individual life insurance.

The option indicating that premiums are fixed for all members regardless of individual characteristics reflects a fundamental quality of group life insurance. In such plans, premiums are largely based on the collective risk of the entire group rather than individual risk factors. This means that while factors such as age, sex, and occupation may influence group rates, the premiums are established for the group as a whole, rather than tailored to individual members' specific health or personal characteristics.

In contrast, premiums that vary based on age, sex, or occupation are typical in individual life insurance. For example, individual premiums might be directly influenced by an applicant's age since older individuals generally have a higher mortality risk. Similarly, premiums may fluctuate based on the individual's sex due to statistical mortality differences between genders, and occupation may also play a role because certain jobs carry more risk than others.

Thus, the option stating that premiums are fixed for all members is not a characteristic of typical group life insurance, making it the correct answer in differentiating group policies from individual approaches.