West Virginia State Life Insurance Practice Exam

Which factor might an insurer consider when assessing a group life insurance application?

1. The collective health profile of the group as a whole

2. The age of individual members

3. Specific occupations of all group members

4. The financial history of the group

The correct answer is: The collective health profile of the group as a whole

An insurer evaluates a group life insurance application by examining the collective health profile of the group as a whole because this factor influences the overall risk assessment for the policy. By looking at the health profile, insurers can determine the likelihood of claims arising from the group, which in turn affects premium calculations and underwriting standards. Considering the health of the entire group allows the insurer to mitigate risk more effectively, unlike individual assessments which could overlook broader health trends within the group. For instance, if a group has a high incidence of health issues, the insurer may adjust premiums or policy terms to align with that risk. This collective evaluation approach is a fundamental aspect of group life insurance, as it reflects the shared characteristics and risks present among members. In contrast, the age of individual members, specific occupations, and the financial history of the group, while important factors in other contexts, are secondary to understanding the overall health dynamics of the group when it comes to group life insurance underwriting.