Colorado Life Producer License Practice Test

Are employees considered to be policyholders in group life insurance?

1. Yes

2. No

3. Only if they have a separate policy

4. Only during their employment

The correct answer is: No

In the context of group life insurance, employees are not considered policyholders in the same way that individual policyholders are in personal insurance policies. Instead, the employer or the group sponsor holds the master policy. This means that the employer is responsible for the administration of the policy and the coverage details, while the employees receive coverage as members of the group. Each employee is typically a beneficiary of the policy rather than a policyholder themselves. The master policy is issued to the employer, which has the authority to make decisions regarding the policy, such as coverage terms and premium payments. Consequently, while employees benefit from the insurance coverage, they do not own the policy, which is why the correct response is that they are not considered policyholders. The other options suggest circumstances where employees might be seen as policyholders, such as through having a separate policy or only during employment, which does not accurately reflect the definition of policyholders in the context of group insurance.