Montana State Life Insurance Practice Exam

What is the minimum number of participants required for a group life insurance policy in Montana?

1. 1 employee

2. 2 employees

3. 5 employees

4. 10 employees

The correct answer is: 2 employees

In Montana, a group life insurance policy typically requires a minimum of two participants to be considered valid. This requirement is in place to ensure that the policy is truly a group policy and not just an individual policy being framed as such. The essence of a group life insurance policy is to provide coverage to a number of individuals under a single master contract, promoting a shared risk across the group. Having only one employee would not fulfill the criteria for a group insurance setup, as it lacks the fundamental aspect of pooling risk among multiple individuals. Therefore, two employees create a sufficient basis for the group concept, allowing the insurance company to assess risk and provide coverage accordingly. This requirement helps to protect both the insurer and the insured by ensuring that there is a collective body of individuals whose lives are covered, fostering a more stable insurance arrangement.