Primerica Life Producer Practice Test

A group of skydivers cannot get group life insurance and are rejected because?

1. They do not meet the minimum age requirement

2. The purpose of the group was to purchase life insurance

3. They have a high-risk lifestyle

4. They lack a formal organizational structure

The correct answer is: The purpose of the group was to purchase life insurance

The rejection of group life insurance for a group of skydivers can be correctly attributed to the purpose of the group being primarily to purchase life insurance. Group life insurance is intended for organized groups with a common purpose, such as employers providing coverage for employees or associations covering members. When the primary intent of the group is merely to acquire insurance, rather than to engage in a shared and legitimate activity or to fulfill a cohesive purpose, the insurance provider may view this as a red flag. The underwriting guidelines typically require that the group be formed for reasons other than simply obtaining insurance, as this could imply an increased risk of fraudulent claims or higher mortality risks associated with the group's activities. Therefore, the life insurance company is likely to reject their application on these grounds.