Select the correct statement.

Rationale

All eligible employees must be covered by a non-contributory group life plan.

In a non-contributory group life insurance plan, the employer pays the entire premium, ensuring that all eligible employees are automatically covered without needing to contribute financially. This type of coverage is designed to provide financial security for employees and their beneficiaries without placing a burden on the employees to opt-in or pay premiums.

A (All eligible employees must be covered by a non-contributory group life plan.) CORRECT

This statement accurately reflects the nature of non-contributory plans, where employers are required to cover all eligible employees. Since the coverage is fully funded by the employer, it guarantees that every eligible employee receives life insurance protection without having to take any action or provide contributions.

B (Only a small percentage of eligible employees must want and be willing to pay for coverage under a contributory group life plan.) YOUR ANSWER

This statement misrepresents the nature of contributory plans. While it is true that participation in contributory plans is voluntary and dependent on employee interest, saying "only a small percentage" is misleading, as it does not capture the variability in employee preferences and willingness to pay across different organizations and demographics.

C (Both A and B are correct.) YOUR ANSWER

This choice cannot be correct because statement B is inaccurate. Since only one of the statements (A) holds true, this option fails as well. The correctness of statement A conflicts with the ambiguity and inaccuracy presented in statement B.

D (Neither A nor B is correct.) YOUR ANSWER

This choice is incorrect because statement A is indeed correct. By asserting that neither statement is correct, this option overlooks the requirement for all eligible employees to be covered under non-contributory plans.

Conclusion

Understanding the distinction between non-contributory and contributory group life plans is essential. Non-contributory plans mandate coverage for all eligible employees at no cost to them, while contributory plans depend on individual employee participation. Therefore, option A stands as the only accurate statement, ensuring comprehensive coverage for employees in a non-contributory setting.

Select the correct statement.

All eligible employees must be covered by a non-contributory group life plan.

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