West Virginia State Life Insurance Practice Exam

Which of the following statements about noncontributory employee group life insurance is FALSE?

1. A minimum number of employees is required to participate

2. The employer pays the entire premium

3. Coverage is provided to all eligible employees

4. Enrollment can occur without employee contribution

The correct answer is: A minimum number of employees is required to participate

The statement that noncontributory employee group life insurance requires a minimum number of employees to participate is false. Noncontributory plans are designed to provide insurance coverage to all eligible employees without requiring any contributions from them towards the premium. This characteristic is central to how noncontributory plans function; they must provide coverage without imposing participation limits based on employee numbers. In this context, the other statements accurately reflect the nature of noncontributory group life insurance. The employer is responsible for paying the full premium, signifying that employees do not need to contribute financially to receive their coverage. Since coverage is extended to all eligible employees under a noncontributory plan, there is no option for employees to opt-out due to premium costs. Additionally, enrollment can indeed occur without requiring employee contributions, which means that the entire enrollment process is seamless for the employee. This makes the other statements consistent with the definition and function of noncontributory group life insurance.