Benefits Beginner: Group Term Life Insurance

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Individual term life insurance may be less expensive than group term insurance if _______.

You suffer from a chronic health condition

You are very healthy

You are young

Both B and C

Both B and C. The young and the healthy normally pay lower premiums.

In a group term life insurance plan, the employees select the policy benefits.

True

False

False. The employer does.

Under IRS rules, the first ________ of group term life insurance provided as an employee benefit is tax-free to the employee.

$25,000

$50,000

$75,000

$100,000

$50,000. Anything above that amount is taxable.

Whole life insurance premium rates are more expensive than term insurance rates because _______.

You are funding investments that will pay for the policys cash value if you terminate the policy

The insurance company always makes a higher payout for a whole life policy than a term policy

You have to wait longer after the death of the insured person to receive a payout for term life rather than whole life

None of the above

You are funding investments that will pay for the policys cash value if you terminate the policy. This will naturally cost you more.

If your group term life insurance policy allows you a conversion benefit, that means you can _______.

Extend coverage to your family members

Covert the policy from term to whole life

Turn the policy into an individual one when you terminate employment

None of the above

Turn the policy into an individual one when you terminate employment. Turn the policy into an individual one when you terminate employment. Conversion refers to switching between a group and an individual plan.