State RegulationsTX specificDifficulty 2/5
In a Texas employer group life plan, an employee declines coverage during the initial eligibility period and then enrolls a year later. Under Texas group underwriting rules, what is the insurer's position on evidence of insurability for that employee?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under TIC 1131.053, group life is underwritten on the group as a whole: the insurer evaluates the group's characteristics and normally covers members who enroll during the eligibility period without individual evidence, but it may require evidence of insurability from a person who applies after that window closes, in order to guard against adverse selection. The practical consequence is that agents should stress the enrollment deadline, because missing it can mean a medical review, a reduced amount, or a declined application.
Why the other options are wrong
- A) The insurer may require evidence in defined circumstances, most notably on late enrollment.
- C) Requiring evidence from every member would contradict the group mechanism of underwriting the group as a whole.
- D) Group underwriting is not individual underwriting of every member; timely enrollees are routinely covered without evidence.
Memory hook
Enroll on time and skip the exam; enroll late and earn it.