****CA Life and Health Chapter 9 Group Life Insurance, Retirement plans, and Social Security Disability Program Multiple Choice

What percentage of a company's employees must take part in a noncontributory group life plan? A) 0% B) 25% C) 75% D) 100%

D) 100%

Within how many days of termination of employment must an employer give notice of the employee's right to convert the group policy to an individual policy? A) 25 days B) 5 days C) 31 days D) 15 days

D) 15 days

What is the limiting age for dependent children of the insured employee in a group life plan (other than disabled children)? A) 30 B) 19 C) 24 D) 26

D) 26

For a retirement plan to be qualified, it must be designed for the benefit of A) IRS B) Employees C) Key employee D) Employer

B) Employees

When an employee terminates coverage under a group insurance policy, coverage continues in force A) Until the employee notifies the group insurance provider that coverage conversion policy is issued B) For 31 days C) For 60 days D) Untl the employee can obtain coverage under a new group plan

B) For 31 days

Group life insurance is a single policy written to provide coverage to members of a group. Which of the following statements concerning group life is CORRECT? A) Coverage cannot be converted when an individual leaves the group B) Premiums are determined by age, occupation, and individual underwriting C) 100% participation of members is required in noncontributory plans D) Each member covered receives a policy

C) 100% participation of members is required in noncontributory plans

If a person is disabled at age 27 and meets Social Security's definition of total disability, how many work credist must he/she have earned to receive benefits? A) 40 credits B) 12 credits C) 20 credits D) 6 credits

B) 12 credits

The Minimum number of credits required for partially insured status for Social Security disability benefits is A) 4 credits B) 6 credits C) 10 credits D) 40 credits

B) 6 credits

Which of the following insurance arrangements will be appropriate for a parent buying a life insurance policy on a child where the parent is the policyowner? A) An irrevocable beneficiary B) A buy-sell agreement C) Family term rider D) Third-party ownership

D) Third-party ownership

When employees are covered by group insurance, they receive A) A certificate of insurance B) The original policy C) A copy of the policy D) The dividends, if any, in cash

A) A certificate of insurance

All of the following could own group life insurance EXCEPT A) A group needing low-cost life insurance B) A group sponsored by an employer C) An alumni group D) A debtor group

A) A group needing low-cost life insurance

Selection of coverage in employee benefits refers to A) Employee choosing benefits B) Employer choosing providers C) Employer choosing the benefits for employees D) None of the above

A) Employee choosing benefits

If a retirement plan or annuity is "qualified", this means A) It is approved by the IRS B) It has a penalty for early withdrawal C) It accepts after-tax contributions D) It is noncancellable

A) It is approved by the IRS

In order to qualify for conversion from a group life policy that has been terminated to an individual policy of the same coverage, a person must have been insured under the group plan for how many years? A) 1 B) 3 C) 5 D) 10

C) 5

Who is a third-party owner? A) Employee in a group policy B) An irrevocable beneficiary C) A policyowner who is not the insured D) An insurer who issues a policy for two people

C) A policyowner who is not the insured

Social security benefits are available for a surviving spouse until the youngest child reaches age 16. Benefits are again available for the spouse after reaching age 60. What is the time period called during which the surviving spouse does not receive benefits? A) Waiver of premium B) Annuitization period C) Cancellation D) Blackout period

D) Blackout period

In a group life insurance policy, the employer may select all of the following EXCEPT A) The type of insurance B) The amount of insurance C) The premium payor D) The beneficiary

D) The beneficiary

To attain currently insured status under Social Security, a worker must have earned at least how many credits during the last 13 quarters? A) 4 credits B) 6 credits C) 10 credits D) 40 credits

B) 6 credits

If an insured worker has earned 40 quarters of coverage, the worker's status under Social Security disability is A) Permanently insured B) Fully insured C) Partially insured D) Correctly insured

B) Fully insured

All of the following are true regarding the issuance of group life insurance to labor unions EXCEPT A) Premiums may be paid through individual member funds B) Members cannot be excluded from coverage on the basis of insurability C) Premium may be paid through union funds D) Only members of the union are eligible for coverage

B) Members cannot be excluded from coverage on the basis of insurability

Which of the following are generally NOT considered when underwriting group insurance? A) The size of the group B) The insured's medical history C) The nature of the group D) The group's past claim experience

B) The insured's medical history

How is Social Security funded? A) State payroll taxes B) Sales tax C) Federal grant money D) Taxes imposed on a worker's earned income

D) Taxes imposed on a worker's earned income

Which of the following is NOT a factor in determining qualifications for Social Security disability benefits? A) Worker's PIA B) Worker's age C) Number of work credits earned D) Worker's occupation

D) Worker's occupation

An employee is insured under her employer's group life plan. If she terminates her group coverage, which of the following statements is INCORRECT? A) The premium for individual coverage will be based upon the insured's attained age B) The insured may choose to convert to term or permanent individual coverage C) The insured would not need to prove insurability for a conversion policy D) The insured may convert coverage to an individual policy within 31 days

B) The insured may choose to convert to term or permanent individual coverage

Social Security was created to provide all of the following EXCEPT A) Retirement income B) Unemployment income C) Survivor's benefits D) Disability income

B) Unemployment income

All of the following benefits are available under Social Security EXCEPT A) Death benefits B) Welfare benefits C) Old-age and retirement benefits D) Disability benefits

B) Welfare benefits

All of the following are characteristics of group life insurance EXCEPT A) Individual covered under the policy receive a certificate of insurance B) Certificate holders may convert coverage to an individual policy without evidence of insurability C) Premiums are determined by the age, sex, and occupation of each individual certificate holder D) Amount of coverage is determined according to nondiscriminatory rules

C) Premiums are determined by the age, sex, and occupation of each individual certificate holder

In terms of Social Security, what is the interval spanning between the day when the youngest child of a family turns 16 and before the surviving spouse turns age 60 is called? A) Blackout period B) Nonpayment interval C) Latent interval D) Accumulation period

A) Blackout period

A group of 15 skydivers met at a seminar and begin talking about life insurance during a break. Because it is expensive to get individual life insurance, they decide to band together to form a small group so that they will be eligible. They apply for small group life insurance and are rejected. Why? A) The purpose of the group was to purchase life insurance B) Their profession poses too high of a risk for the insurer C) There are not enough people in the group to qualify for group life insurance D) The group has not been established for long enough

A) The purpose of the group was to purchase life insurance

Which of the following is TRUE of a qualified plan? A) It may allow unlimited contributions B) It has a tax benefit for both employer and employee C) It does not need to have a vesting schedule D) It may discriminate in favor of highly paid employees

B) It has a tax benefit for both employer and employee

Which of the following best describes the insurer's liability for losses arising from military service? A) The insurer's liability is always reduced B) The insurer's liability may be reduced or excluded C) The insurer is liable for all losses D) The insurer's liability is always excluded

B) The insurer's liability may be reduced or excluded

An association could buy group insurance for its members if it meets all of the following requirements EXCEPT A) Its contributory B) Has at least 50 members C) Has a constitution and by-laws D) Holds annual meetings

B) Has at least 50 members

Employer contributions made to a qualified plan A) Are subject to vesting requirements B) May discriminate in favor go highly paid employees C) Are after-tax contributions D) Are taxed annually as salary

A) Are subject to vesting requirements

All of the following are examples of third-party ownership of a life insurance policy EXCEPT A) When an insured purchased a new home, the insured made an absolute assignment of a life insurance policy to the mortgage company B) An insured borrows money from the bank and makes a collateral assignment of a part of the death benefit to secure a loan C) An insured couple purchases a life insurance policy insuring the life of their own grandson D) A company purchases a life insurance policy on their manager, who is an important part of the operation

B) An insured borrows money from the bank and makes a collateral assignment of a part of the death benefit to secure a loan

An insured becomes disabled at age 22 and can no longer work. She meets the definition of total disability under Social Security. What other requirement must the insured have met to receive Social Security disability benefits? A) Have reached the age of 25 B) Have accumulated 6 work credits in the past 3 years C) Have accumulated 20 work credits in the past 10 years D) Have accumulated 40 work credits

B) Have accumulated 6 work credits in the past 3 years

Which of the following is an eligibility requirement for all Social Security Disability Income benefits? A) Be at least age 50 B) Have attained fully insured status C) Be disabled for at least 1 year D) Have permanent kidney failure

B) Have attained fully insured status

Which of the following is INCORRECT concerning a noncontributory group plan? A) The employer pays 100% of the premiums B) The employees receive individual policies C) They help to reduce adverse selection against the insurer D) They require 100% employee participation

B) The employees receive individual policies

What is the official name for the Security program? A) Old age Survivors Disability Insurance B) Social Insurance Program C) Defined Benefit Retirement Insurance D) Qualified Pension Plan

A) Old age Survivors Disability Insurance

All of the following statements are TRUE concerning Debtor Groups EXCEPT A) The amount of insurance on the life of any debtor may exceed the greater of the scheduled or actual amount of unpaid indebtedness to the creditor B) The debtors are eligible for insurance under the policy shall all be the debtors of the creditor(s) C) The premium for the policy shall be paid either from the creditor's funds, or from charges collected from the insured debtors, or from both D) An insurer may exclude any debtors as to whom evidence of individual insurability is not satisfactory to the insurer

A) The amount of insurance on the life of any debtor may exceed the greater of the scheduled or actual amount of unpaid indebtedness to the creditor

Vision, Inc. employs 500 people. The company offers group life insurance to its employees after 90 days of service. Who is considered the policyholder of the life insurance policies Vision, Inc. offers? A) Vision Inc. B) Each individual employee C) The beneficiaries of the insurance policies D) The insurance company

A) Vision Inc.

According to California law, all of the following may be covered as dependents under group life insurance EXCEPT A) Disabled children of the insured over age 26 B) The insured's elderly parents living with the insured C) The insured's spouse D) The insured's unmarried child, age 25

B) The insured's elderly parents living with the insured

All of the following are requirements of eligibility for Social Security disability income benefits EXCEPT A) Fully insured status B) Waiting period of 5 months C) Being age 65 D) Inability to perform any gainful work

C) Being age 65

After an employee was laid off, he was informed of the right to convert the group coverage to an individual policy within 31 days. Twenty days into the conversion period, the employee suffered a heart attack and died before he could obtain individual coverage. What is the group policy insurer required to do? A) The insurer only has to pay the death benefit if ordered by the courts B) The insurer is only obligated to refund unused premiums C) The insurer must pay the death benefit under the former group coverage D) The insurer has no obligation to pay the claim

C) The insurer must pay the death benefit under the former group coverage

An employee quits his job on May 15 and doesn't convert his Group Life policy to an individual policy for 2 weeks. He dies in a freak accident on June 1. Which of the following statements best describes what will happen? A) The insurer will pay a reduced death benefit to the beneficiary B) The insurer will pay the death benefit minus one month's premium C) The insurer will pay nothing because the employee has terminated his group insurance and hasn't started the individual one D) The insurer will pay the full death benefit from the group policy to the beneficiary

D) The insurer will pay the full death benefit from the group policy to the beneficiary

Which of the following insurance arrangements will be appropriate for a parent buying a life insurance policy on a child where the parent is the policyowner? A) Third-party ownership B) An irrevocable beneficiary C) A buy-sell agreement D) Family term rider

A) Third-party ownership

An employee has group life insurance through her employer. After 5 years, she decides to leave the company and work independently. How can she obtain an individual policy? A) She can convert her group policy to an individual policy without proof of insurability within 31 days of leaving the group plan B) She will still be covered under the group plan, but will have to pay an individual policy premium C) She can only convert her coverage without proof of insurability if she has the master policy D) She must apply for a new policy, which requires her to provide proof of insurability

A) She can convert her group policy to an individual policy without proof of insurability within 31 days of leaving the group plan

All of the following are general requirements of a qualified plan EXCEPT A) The plan must be communicated to all employees B ) The plan must be for the exclusive benefits of the employees and their beneficiaries C) The plan must be permanent, written, and legally binding D) The plan must provide an offset for social security benefits

D) The plan must provide an offset for social security benefits

What is the number of credits required for fully insured status for Social Security disability benefits? A) 4 B) 10 C) 30 D) 40

D) 40

An employee quits his job and converts his group policy to an individual policy; the premium for the individual will based on his A) Experience rating B) Group rate C) Insurer's scheduled rate D) Attained age

D) Attained age

After being hired to deliver newspapers to his neighbors, a man is provided with $10,000 of life insurance by the newspaper. He would be covered under which kind of life insurance? A) Blanket life B) Group life C) Ordinary life D) Universal life

A) Blanket life

Which of the following employees insured under a group life plan would be allowed to convert to individual insurance of the same coverage once the plan is terminated? A) Those who have dependents B) Those who have no history of claims C) Those who have been insured under the plan for at least 5 years D) Those who have worked in the company for at least 3 years

C) Those who have been insured under the plan for at least 5 years

Which of the following is the required number of participants in a contributory group plan? A) 50% B) 75% C) 100% D) 25%

B) 75%