In Contributory Plans, Where Employees Pay All or Part of the Premium

question 57

Multiple Choice

In contributory plans, where employees pay all or part of the premium amount, 75 percent of employees must participate.Identify the rationale for this rule.

• A)It helps reduce the premiums for group insurance contracts.
• B)It helps in gaining accurate information about insureds participating in the contract.
• C)It helps protect the plan from adverse selection.
• D)It helps the underwriter to acknowledge attribution error.
• E)It helps the employer to take stop loss insurance and reinsurance contracts to limit losses.

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Definitions:

Gifts-In-Kind

Non-monetary items of tangible personal property or services provided to an organization as donations.

Corporate Giving

financial or in-kind contributions made by companies to non-profit organizations or communities to support social, environmental, or cultural projects.

Altruism

The principle or practice of concern for the welfare of others, often manifested through selfless acts or donations.

Self-Directed Giving

A philanthropic approach where donors independently select and support causes or organizations without intermediary influence or direction.