policy owner pays premiums and evidence of insurability is required, the grace peroid is min of 30 days does not include home service , grp or industrial policies
This group insurance is unique in that a Master Policy is not issued since underwriting
is on an individual basis and individual policies are issued. Therefore, evidence of
insurability may be required. The employer may be the premium payor or the premium
may be shared by the employer and employee. The grace period is a minimum of
30 days, with the employer being responsible for the plan administration making it
less expensive than individual policies. The insurer requires a minimum number of
participants before underwriting and the group must be together for reasons other than
purchasing less expensive insurance.
The employer is issued a Master Policy and each employee receives a Certificate
of Insurance covering the employee and if offered, his/her dependents.
Employees do not have personal control of the policy or policy changes as with
an individual policy. min of 31 days of grace peroid
Continuation ( under group)
after retirement is accomplished by the Retired Lives Reserves
(RLR) system. The employer pays an equal premium amount each month while
the employee is active to pay for a reduced retirement benefit. Continuation due
to disability may be accomplished if the disability occurred while covered under
the group and the claim is filed within 12 months of the disability.
An employee must be a full time employee in the immediate group, a
subsidiary firm or an employee of any active partner to be eligible for
If the employee does not enroll when first eligible, or waits until the
eligibility period closes, the insurer may require proof of insurability
to reduce adverse selection. Typically, the employer will have an open
enrollment at each plan anniversary.
employees must contribute to the premium payments
and at least 75% of all eligible employees must participate
employer pays all of the premium with a mandatory
100% of the eligible employees participating. The percentage
participation requirements are used to reduce adverse selection
Labor Union Groups
The Taft-Hartley Act prohibits employers from turning over funds directly to
a union. A separate fund must be set up and trustees appointed to manage the
fund. the plan must be for the benefit for someone other than the union
Multiple-Employer Trusts (METs)
METs may be sponsored by insurers, independent administrators or 2 or
more employers of the same industry.
Credit Life Insurance (Individual and Group)
a. The amount of insurance benefit shall not exceed the total amount of
b. The coverage begins when the debtor becomes obligated to the creditor.
c. The creditor must apply the insurance proceeds to discharge the loan.
d. The creditor is normally both policyowner and beneficiary.
e. The term of coverage is generally month-to-month covering the installment
Industrial (Home Service)
Individual policies are issued to low-income workers without a medical
examination requirement. The premiums are collected weekly or monthly by the
insurance agent servicing that particular area or paid directly to the insurer.
These policies are marketed house-to-house by a Debit agent, also known as a
Home Service agent.
Facility of Payment Clause - the company may pay to a relative or anyone it
deems entitled to the benefits in the absence of a designated beneficiary.
Social Security System
It is not fully funded and provides only a minimal base of income
These funds are collected, kept in a trust fund, and invested in government
securities. This fund is managed by two public trustees and the Secretaries of the
Treasury, Labor, and Health and Human Services
Fully Insured for social security
40 quarters of covered employment since 1936. If the insured has
attained age 21 after 1950, he/she is considered fully insured if that individual
has acquired a minimum of 6 quarters of covered employment with 1 quarter
for each year over age 21. a. Retirement at age 62 or older.
b. Spousal retirement at age 62 or older.
c. Dependent child of retired worker.
d. Spouse of retired worker at any age if caring for a dependent child.
e. Widow or widower at age 60, or at age 50 if disabled.
f. A dependent parent of a deceased worker.
all are coverd if fully insured
a worker must be covered at least 6 quarters during the
full 13-quarter period ending with the quarter in which he/she: dies, becomes
disabled, or is entitled to retirement benefits.
pays benefits to workers (age 65 or reduced benefits at age 62) and