Group Life Insurance, Retirement Plans, and Social Security Disability Program

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

Employees.

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

Old Age Survivors Disability Insurance

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

26

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

75%

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.

Fully insured.

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

Has at least 50 members.

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

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

Worker's occupation

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

Unemployment income.

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 certificate of insurance.

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

Welfare benefits.

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.

100% participation of members is required in noncontributory plans.

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.

6 credits.

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

Has at least 50 members.

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

12 credits

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

A group needing low-cost life insurance.

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

Fully insured.

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

Third-party ownership

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

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

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 has no obligation to pay the claim. B The insurer only has to pay the death benefit if ordered by the courts. C The insurer is only obligated to refund unused premiums. D The insurer must pay the death benefit under the former group coverage.

The insurer must pay the death benefit under the former group coverage.

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

A certificate of insurance.

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

Are subject to vesting requirements.

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

The employees receive individual policies.

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.

The employees receive individual policies.

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

The insured's elderly parents living with the insured.

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

100%

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 called? A Blackout Period B Nonpayment Interval C Latent Interval D Accumulation Period

Blackout Period

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

It has a tax benefit for both employer and employee.

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

The insureds' medical history

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 insured would not need to prove insurability for a conversion policy. B The insured may convert coverage to an individual policy within 31 days. C The premium for individual coverage will be based upon the insured's attained age. D The insured may choose to convert to term or permanent individual coverage.

The insured may choose to convert to term or permanent individual 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.

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

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

For 31 days.

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.

The beneficiary.

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

Employee choosing benefits.

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

A policyowner who is not the insured

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

The plan must provide an offset for social security benefits.

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

Attained age.

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

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

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 Universal life B Blanket life C Group life D Ordinary life

Blanket life

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.

Being age 65.

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

40

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.

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

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

The purpose of the group was to purchase life insurance.

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 no history of claims B Those who have been insured under the plan for at least 5 years C Those who have worked in the company for at least 3 years D Those who have dependents

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

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

5

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

Have attained fully insured status

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

It is approved by the IRS.

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 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.

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.

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

The insurer's liability may be reduced or excluded.

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 accumulated 40 work credits B Have reached the age of 25. C Have accumulated 6 work credits in the past 3 years D Have accumulated 20 work credits in the past 10 years

Have accumulated 6 work credits in the past 3 years

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 Each individual employee B The beneficiaries of the insurance policies C The insurance company D Vision, Inc.

Vision, Inc.

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 Premiums may be paid through union funds. D Only members of the union are eligible for coverage.

Members cannot be excluded from coverage on the basis of insurability.

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

15 days