A master contract and certificate of coverage can be found in which type of policy?

• A. Individual
• B. Group
• C. Nonparticipating
• D. Variable

Answer: (B)

In group insurance, there is a master contract between the insurer and the employer (the policyholder) that covers the group as a whole, and each insured employee receives a certificate of coverage as proof of their individual benefits under that group policy. The master contract outlines the overall terms and what the plan provides, while the certificate details what each person is specifically covered for, who is insured, and how to file claims. An individual policy, by contrast, is a direct contract with one person and doesn’t involve a master contract or employee certificates. Nonparticipating versus participating relates to dividend features, not the presence of a master contract or certificate, and variable refers to investment-linked components, which also don’t define master contract versus certificate. Therefore, the type of policy that includes both a master contract and certificates of coverage is a group policy.