If employees share in the cost of insurance, what type of group life insurance plan would a corporation have?

If employees share in the cost of insurance, what type of group life insurance plan would a corporation have?

• A. Non-contributory
• B. Contributory
• C. Mandatory
• D. Voluntary

Answer: (B)

When employees share in the cost of insurance, it indicates that they are contributing towards their premiums, which characterizes the group life insurance as contributory. In a contributory plan, the employer and employees both contribute to the premium payments. This arrangement allows for a lower overall cost per individual since it's pooled among a larger group, illustrating the collective risk aspect of insurance. In contrast, a non-contributory plan is one where the employer pays the entire premium without any contribution from employees. Mandatory and voluntary, while they describe certain enrollment conditions or options for coverage, do not specifically address the cost-sharing aspect required by the question. Therefore, the presence of employee contributions directly points to a contributory group life insurance plan as the correct answer.

When employees share in the cost of insurance, it indicates that they are contributing towards their premiums, which characterizes the group life insurance as contributory. In a contributory plan, the employer and employees both contribute to the premium payments. This arrangement allows for a lower overall cost per individual since it's pooled among a larger group, illustrating the collective risk aspect of insurance.

In contrast, a non-contributory plan is one where the employer pays the entire premium without any contribution from employees. Mandatory and voluntary, while they describe certain enrollment conditions or options for coverage, do not specifically address the cost-sharing aspect required by the question. Therefore, the presence of employee contributions directly points to a contributory group life insurance plan as the correct answer.