Question

Who are the parties to the master contract in a group life insurance policy? A) Insurer and employee B) Employer and employee C) Insurer and employer D) Employer and beneficiary"

a) Insurer and employee
b) Employer and employee
c) Insurer and employer
d) Employer and beneficiary

Answer 1

The parties to the master contract in a group life insurance policy are the insurer and the employer (C). Actuarially fair premiums would vary if the risk is assessed per group or for a combined group without detailed family health histories.

Step-by-step explanation:

The parties to the master contract in a group life insurance policy are the insurer and the employer. So, the correct answer to this question would be C) Insurer and employer. The employer holds the master policy and essentially provides coverage to its employees. Employees are considered to be certificate holders under the group policy, but they are not parties to the contract itself.

Regarding the actuarially fair premium calculation, for different groups that may have varying rates of risk (such as those based on family cancer histories), the actuarially fair premium would be based on the risk profile of each separate group.

If the insurer is providing life insurance to a combined group without knowledge of individual family cancer histories, the actuarially fair premium would need to be calculated based on the amalgamated risk profile, with the premium likely balancing between the lower and higher-risk groups.