A noncontributory group term life plan is characterized by what?

Study for the Texas General Lines – Life, Accident, and Health Insurance exam. Engage with questions, hints, and explanations. Get exam ready!

Multiple Choice

A noncontributory group term life plan is characterized by what?

Explanation:
In a noncontributory group term life plan, the funding comes entirely from the employer, not the employees. That means the employer pays the full premium and employees contribute nothing toward the cost. This setup typically provides term-life coverage to all eligible employees (often with a requirement for 100% participation) and, since it’s term life, there’s usually no cash value accumulating inside the policy.

In a noncontributory group term life plan, the funding comes entirely from the employer, not the employees. That means the employer pays the full premium and employees contribute nothing toward the cost. This setup typically provides term-life coverage to all eligible employees (often with a requirement for 100% participation) and, since it’s term life, there’s usually no cash value accumulating inside the policy.

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