Which statement describes a contributory group life plan?

• A. The employer pays the entire premium
• B. Only the employee contributes
• C. The borrower receives benefits
• D. The employee contributes portion of premium and employer pays rest

Answer: (D)

In a contributory group life plan, the cost of coverage is shared between the employer and the employee. The employee pays part of the premium (typically through payroll deductions) and the employer pays the rest. This distinguishes it from a noncontributory plan, where the employer covers the entire premium. Sometimes contributing employees must meet a minimum participation rate, but the key idea is that both sides contribute to the cost. The option that says only the employee contributes describes a different, unlikely setup, and the one about the borrower receiving benefits isn’t about how the premium is funded.