In a noncontributory group term life plan, who pays the entire cost of the plan?

In a noncontributory group term life plan, who pays the entire cost of the plan?

• A. Employee
• B. Employer
• C. Insurer
• D. Both employee and employer

Answer: (D)

The key idea is that noncontributory means the employer covers the full premium for the group. In a noncontributory group term life plan, all eligible employees are offered coverage, and the employer pays the entire cost of the plan—there are no employee premium contributions. The master policy is issued to the employer, who funds the coverage for everyone eligible. This differs from contributory plans, where employees share in the cost by contributing part of the premium.

The key idea is that noncontributory means the employer covers the full premium for the group. In a noncontributory group term life plan, all eligible employees are offered coverage, and the employer pays the entire cost of the plan—there are no employee premium contributions. The master policy is issued to the employer, who funds the coverage for everyone eligible. This differs from contributory plans, where employees share in the cost by contributing part of the premium.