Blanket Life Insurance

A university buys a single life insurance contract covering everyone travelling on any university-sponsored trip. No individual is named, no certificates are issued to travellers, and the covered persons change from trip to trip. What kind of coverage is this?

1. A.Group life insurance with individual certificates issued to each covered person.Ordinary group life enrols identifiable members and issues each a certificate summarising the master contract. Here nobody is enrolled and no certificates exist.
2. B.Franchise, or wholesale, life insurance.Franchise coverage issues separate INDIVIDUAL policies to members of a group, usually at a discount and with simplified underwriting. It is the opposite of a single unnamed-class contract.
3. C.BLANKET life insurance, covering a constantly changing, unnamed class defined by a common activity or status, with no individual certificates.Correct. One contract covers whoever happens to be in the defined class, such as travellers on a sponsored trip, and membership shifts continuously without enrolment.
4. D.Credit life insurance.Credit life insures a borrower for the benefit of a creditor, in an amount tied to the outstanding debt. Nothing in this arrangement involves a loan.

Why: BLANKET life insurance covers a class of persons defined by a common activity or status rather than by name, where the membership of that class is constantly changing. There is one policy, held by the sponsoring organisation, and no individual certificates or enrolment. Typical blanket groups include passengers of a common carrier, students on school activities, campers and volunteers.

A university buys life coverage for whichever students happen to travel on school-sponsored trips. The covered persons change constantly, and no individual certificates are issued. This arrangement is:

1. A.Group term life with certificatesStandard group life covers enrolled, identified members who each receive a certificate - this arrangement issues none.
2. B.Blanket life insuranceCorrect. A shifting, unnamed class tied to a common activity with no individual certificates is the signature of blanket coverage.
3. C.Franchise (wholesale) insuranceFranchise plans issue INDIVIDUAL policies to members of a small group - the opposite of unnamed, certificate-free coverage.
4. D.Credit life insuranceCredit life covers borrowers to the extent of a debt - there is no loan here.

Why: Blanket life insurance covers a changing class of persons exposed to a common hazard - students, airline passengers, sports teams. Because membership fluctuates, individuals are not named and certificates are not issued.