Question

What is one of the significant benefits of implementing a Free Cover Limit (FCL) in an employer-employee group insurance scheme?

a.

It significantly increases the overall cost of the insurance.

b.

It allows for time savings and reduction in underwriting costs.

c.

It ensures that every employee submits individual evidence of insurability.

d.

It increases the likelihood of employees applying for employment to obtain insurance.

Posted under IC 92 Actuarial Aspects of Product Development

Answer: (b).It allows for time savings and reduction in underwriting costs. Explanation:One of the significant benefits of implementing a Free Cover Limit (FCL) in an employer-employee group insurance scheme is that it allows for time savings and reduction in underwriting costs. By providing a level of insurance coverage without requiring individual evidence of insurability, the scheme simplifies the enrollment process, reduces administrative burdens, and decreases the costs associated with individual underwriting. This efficiency is particularly valuable for both the insurer and the insured, making the scheme more attractive and manageable.

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Q. What is one of the significant benefits of implementing a Free Cover Limit (FCL) in an employer-employee group insurance scheme?
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