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Answer :
Final answer:
The main difference between blanket life insurance and franchise policies lies in underwriting and coverage. Franchise policies do not require individual underwriting for each insured, while blanket policies do not specify individual insureds. Therefore, the correct statement is that franchise policy doesn't require individual underwriting.
Explanation:
Understanding Blanket and Franchise Life Insurance Policies
When comparing blanket life insurance policies and franchise policies, several distinctions arise based on coverage, underwriting processes, and group size. Let's break down the differences:
- Franchise Policy: A franchise policy primarily covers a group of individuals, such as employees of a large organization, but does not require individual underwriting for each member. This means that the conditions of insurance are set for the group, making it easier for organizations to obtain large-scale coverage.
- Blanket Policy: A blanket policy, on the other hand, does not specify individual insureds. It provides coverage to an entire group, such as a sports team or a university, without naming each person in the policy. Instead, any member of the defined group is covered under the policy when they fit within the criteria set forth.
Based on this understanding, the correct answer to the student's question about the difference is:
A. Franchise policy doesn't require individual underwriting.This statement accurately reflects the characteristic of franchise policies where individual health or risk factors are typically not assessed for each insured person, as is common in blanket policies.
Conclusion
Both types of policies serve distinct functions in risk management and protection for groups, but they differ primarily in their underwriting processes and how individuals are named in the policies.
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