Florida 2-15 Life, Health and Variable Annuity AgentFlorida Laws and Regulations Specific to Life Insurance and AnnuitiesMedium
A Florida employer provides a non-contributory group life insurance policy for its employees. Which of the following statements is true regarding employee participation in this plan?
- AAt least 75% of eligible employees must participate.
- BAt least 50% of eligible employees must participate.
- CParticipation is optional for eligible employees.
- DAll eligible employees must participate.
Show answer & explanationAnswer & explanation
Correct answer: D. All eligible employees must participate.
For a non-contributory group life insurance plan, all eligible employees must participate. This prevents adverse selection by ensuring a broad risk pool for the insurer.
Why the other options are wrong
- A. This percentage is typically required for contributory plans, not non-contributory.
- B. This percentage is not typically required for non-contributory plans.
- C. Participation is mandatory in non-contributory plans.
Non-Contributory Group Life
A group life insurance plan where the employer pays 100% of the premiums, and all eligible employees must participate.
- Employer pays entire premium.
- 100% employee participation required.
- Helps prevent adverse selection.
Memory trick: Contribution dictates participation: full pay, full play; shared pay, shared say.