Massachusetts State Life Insurance Practice Exam 2025 - Free Life Insurance Practice Questions and Study Guide

Question: 1 / 475

Which type of organization is NOT considered eligible for group life insurance?

Labor unions

Trade associations

Organizations formed solely to purchase insurance

Organizations formed solely to purchase insurance are not considered eligible for group life insurance because they do not meet the necessary criteria typically required for a group policy. Group life insurance is designed to provide coverage to a defined group of individuals who share a common characteristic or purpose beyond solely obtaining insurance. This means that eligible groups generally have a bona fide purpose, such as labor unions, trade associations, or fraternal organizations, which are established for reasons beyond just acquiring insurance benefits.

In contrast, organizations that exist solely for the purpose of purchasing insurance lack that essential element of a common activity or interest that binds members together. Consequently, the nature of these organizations does not align with the requirements set forth by insurers for group coverage, which is intended to serve groups that have a legitimate ongoing relationship.

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Fraternal organizations

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