Chapter 6 Test

Large publicly held corporations

A buy-sell agreement can be used in all of the following businesses, except:

The insured has a say in the form and amount of coverage available to pay particpants

A consumer should know and realize all of the following prior to obtaining coverage under a group insurance policy, except:

6

A partnership has 3 partners who each have an equal ownership interest in their $3,000,000 business. How many policies would have to be purchased under a traditional cross purchase buy-sell agreement plan?

It can only be funded with term life insurance

All of the following are true about a buy/sell agreement, except

The employee chooses which type of insurance to convert to

An employee who si covered under an employer group life insurance plan may assume all of the following are TRUE of the opportunity of conversion, except:

Group

For those individuals who have health issues, which of the following would be an insurance plan to consider?

18

Generally, children receive Social Security Survivor Benefits until age

The sponsor and the insurer

Group life insurance is a contract between what parties?

The employer withholds the employee's tax and pays it along with the employer's portion

How are employee FICA taxes collected?

Late

Individuals who do not enroll during the initial enrollment period are considered _____ enrollees

Income tax free

Proceeds from a buy-sell agreement is recieved____

Blackout

Regarding Social Security Survivor benefits, when the youngest child reaches age 16, the window's/widowers _____ period begins and continues until the surviving (non married) spouse reaches age 60

62

Social security retirement benefits are available as early as age ____ but are less than if paid at the full retirement age

The Conversion Period

The 31 days in which the employee may change his/her group policy to an individual policy upon termination and without evidence of insurability, is known as:

70

The highest monthly Social Security retirement benefit would occur if started at age _____

Key Employee

The proceeds from a ____ plan provide the necessary funds to recruit, hire, and train a replacement employee

18/19

The social security survivor benefit covers children to age ____ and may continue coverage to age ____ if enrolled in an accredited elementary or secondary school

Federal Insurance Contributions Act (FICA) taxes

The social security system is funded through

Preexisting conditions and immediate claims

To help protect against_____ group plans have a probationary period set by the group sponsor

At least 6 credits earned in the 13 calendar quarters prior to death, disability, or is entitled to retirement benefits

What is the minimum requirements for currently insured status under the Social Security system?

Group size, turnover, average age and purpose of the group

When an underwriter evaluates the risks presented with a particular group life application, which of the following is considered the most important?

When the entity buys life insurance on each of the owners

When is an entity buy-sell agreement plan used?

A business owner buying a life policy on his own life

Which of the following is NOT an example of Third-Party Ownership

Proof of insurability is required to be eligible

Which of the following is NOT true regarding a group insurance plan?

The health of each member of the group

Which of the following is the least important when it comest to determining the cost of the group life insurance plan?

The business enters into an agreement to purchase the deceased's interest in the bueinss

Which of the following is true in regard to an Entity Purchase Plan?

Self-employed

_____ individuals pay a FICA tax amount equal to the total of an employer and employees payment

State and federal laws

_____ restrict the insurer's underwriting criteria for group policies