West Virginia State Life Insurance Practice Exam

Regarding premium payments, what is a feature of group life insurance policies?

1. Payments are typically made by each individual

2. Premiums are usually higher for less frequent payments

3. Employers or associations often handle the premium collections

4. Members must pay premiums directly to the insurance company

The correct answer is: Employers or associations often handle the premium collections

In group life insurance policies, one of the key features is that employers or associations typically handle the premium collections. This setup simplifies the process for individual members, as they do not have to manage their premium payments independently. Instead, the premiums are often deducted from the members' paychecks or collected by the organization, making it more convenient and efficient. This collective approach can also lead to cost savings, as the group policy often offers lower premiums compared to individual policies due to the reduced risk for the insurer and the administrative efficiencies gained by having one entity manage the payment process. As a result, the handling of premium payments by employers or associations is a significant aspect of group life insurance policies that distinguishes them from individual policies.