Chapter 7: Group life

What does the Group Life underwriting risk selection process help protect insurance companies from? A) Risk selection B) Natural selection C) Adverse selection D) Risk management

C) Adverse selection

Which of these factors would an insurer consider when determining whether to accept a group life plan? A) Number of dependents B) Incontestable period C) Average age D) Grace period

C) Average age

Who is issued a certificate of insurance with a group insurance policy? A) Policyholder B) Insurance company C) Participant D) Third-party adminstrator

C) Participant

Employer-provided group term life insurance is exempt from income taxation up to A) $10,000 B) $25,000 C) $40,000 D) $50,000

D) $50,000

Employee participation in a noncontributory group life plan must be A) 25% B) 50% C) 75% D) 100%

D) 100%

An employee under a group insurance policy has the right to name a beneficiary and the right to A) remain on the group plan in the event of employment termination B) cash surrender the existing policy C) change the policy provisions D) convert to an individual policy in the event of employment termination

D) convert to an individual policy in the event of employment termination

A terminated employee that has exercised the conversion privilege is able to convert A) only after providing evidence of insurability B) without paying for the premiums C) permanent insurance into term insurance D) term insurance into permanent insurance

D) term insurance into permanent insurance

Tim was recently terminated from his employment and opted to change his existing group term life insurance to individual permanent life insurance. What is this process called? A) Replacement B) Conversion C) Transformation D) Reinstatement

B) Conversion

How is the cost of employer-provided group life insurance with coverage amounts above $50,000 treated for tax purposes? A) Tax deductible to the employee B) Partially taxable to the employer C) Fully taxable to the employer D) Taxable income to the employee

D) Taxable income to the employer

Converting a group plan to permanent life insurance requires A) submitting proof of insurability B) paying a lower premium C) converting to term life insurance D) the conversion being applied for within 31 days of termination

D) the conversion being applied for within 31 days of termination

Which of the following describes a contributory group insurance plan? A) All of the premium is paid by the employer B) Part of the premium is paid by the employee C) Employees are eligible for policy dividends D) Federal government contributes a portion of the employee's premium

B) Part of the premium is paid by the employee

Under a group life policy, the insurer will issue an individual _____ to the policyowner for delivery to each person insured. A) policy B) certificate C) application D) rider

B) certificate

The coverage, conditions, and limitations in the master policy of a group contract can be found in which document? A) Certificate of Authority B) Consumer report C) Coverage document D) Certificate of coverage and benefits

D) Certificate of coverage and benefits

How does underwriting differ between group life and individual life insurance? A) Group life insurance normally charges a higher premium B) Individual life insurance is normally written as an annually renewable term policy C) Individual life insurance can normally be converted to group life insurance D) Medical questions must be answered on individual life insurance

D) Medical questions must be answered on individual life insurance

Who are the parties to the master contract in a group life insurance policy? A) Insurer and employee B) Employer and employee C) Insurer and employer D) Employer and beneficiary

C) Insurer and employer

A type of group that has a constitution and bylaws and has been organized for purposes other than obtaining insurance is called a(n) A) employer group B) employee group C) association or labor group D) multiple coalition

C) association or labor group

All of the following are considered characteristics of group life insurance, EXCEPT A) certificates of insurance B) conversion privilege C) individual policies D) master policy

C) individual policies

Which of the following is NOT a characteristic of the conversion privilege? A) Ex-employee pays the premium for the converted policy B) Proof of insurability is not required C) Employer pays the premium for the converted policy D) Conversion must take place within 31 days of employment termiation

C) Employer pays the premium for the converted policy

All of the following are characteristics of a Group Life Insurance Plan EXCEPT A) Group underwriting B) Master contract C) Individual underwriting D) Probationary period

C) Individual underwriting

The conversion privilege under a group life plan allows an employee to convert to a(n) A) family plan with another insurer B) individual plan with another insurer that has better rates C) individual plan upon employment termination D) individual policy in the spouse's name

C) individual plan upon employment termination

Tim is covered under a group plan and would like to change his group coverage to an individual policy with the same insurer because of employment termination. Which of these describes the change that will take place? A) Coordination of benefits B) Conversion C) Extension of benefits D) Rollover

B) Conversion

A non-contributory health insurance plan helps the insurer avoid A) adverse selection B) state compliance C) the underwriting process D) tax deductions

A) adverse selection

Which of the following is NOT a requirement for a terminated employee that has exercised the conversion privilege? A) Convert within 31 days B) Convert up to the previous amount of group coverage C) Provide proof of insurability D) Premium must be paid

C) Provide proof of insurability