If group life insurance premiums are paid totally by the employer, the MINIMUM percent of eligible employees required to be covered is

Rationale

100% of eligible employees must be covered if group life insurance premiums are paid totally by the employer.

When an employer fully funds group life insurance premiums, regulations often stipulate that all eligible employees must be enrolled in order to maintain the plan's validity and cost-effectiveness. This requirement ensures equitable coverage and minimizes adverse selection risks.

A (25%) YOUR ANSWER

This option is incorrect because allowing only 25% of eligible employees to be covered would not meet the legal requirements for fully employer-paid group life insurance plans. Such a low percentage could lead to significant risk for the insurer and undermine the purpose of group coverage.

B (50%) YOUR ANSWER

A requirement for 50% coverage also fails to satisfy regulations for employer-paid group life insurance. While a substantial percentage, it still does not meet the standard that necessitates complete participation to ensure fair risk distribution among covered employees.

C (75%) YOUR ANSWER

Similarly, 75% is insufficient for an employer-funded group life insurance plan. While closer to full coverage, it still does not fulfill the requirement that mandates 100% participation to avoid potential issues related to adverse selection and to uphold the integrity of the insurance pool.

D (100%) CORRECT

This is the correct choice because when premiums are entirely paid by the employer, regulations typically require that all eligible employees must be covered. This ensures comprehensive coverage and prevents imbalances that could arise from having only a subset of employees insured.

Conclusion

In summary, for group life insurance where premiums are entirely funded by the employer, it is imperative that 100% of eligible employees are covered. This requirement not only ensures compliance with insurance regulations but also promotes fairness and stability within the insurance pool. All other options fall short of this critical standard, potentially jeopardizing the effectiveness and legality of the insurance plan.

If group life insurance premiums are paid totally by the employer, the MINIMUM percent of eligible employees required to be covered is

100% of eligible employees must be covered if group life insurance premiums are paid totally by the employer.

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