A small business recently established a group life insurance plan for its employees. Which of the following is most accurately describes the typical characteristics of the underwriting process for such a plan?

Question: A small business recently established a group life insurance plan for its employees. Which of the following is most accurately describes the typical characteristics of the underwriting process for such a plan?

Answer options:

• Individual medical examinations are usually required for all employees to determine eligibility and premium. ✅ Underwriting focuses on the group as a whole, often requiring minimal individual medical information.
• Each employee must complete a full health questionnaire, and coverage amounts are adjusted based on individual risk.
• The insurer assesses the financial stability of the employer, but not the health of the employees.

Correct answer: Underwriting focuses on the group as a whole, often requiring minimal individual medical information.

Explanation: Group insurance underwriting typically focuses on the characteristics of the group as a whole, rather than individual members. This 'group underwriting' approach aims to spread risk across a larger pool of people, often reducing the need for extensive individual medical examinations, especially for non-contributory plans or those with guaranteed issue limits.