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

Third-party owner

A legal term used to identify an individual or entity that is not an insured under the contract, but that has a legally enforceable right under it.

Who is a third-party owner?

A policyowner who is not the insured

When employees are covered by group insurance, they receive

A certificate of insurance.

Employer contributions made to a qualified plan

Are subject to vesting requirements.

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?

Blackout period

What percentage of a company's employees must take part in a noncontributory group life plan?

100%

Selection of coverage in employee benefits plans refers to

Employee choosing benefits.

For a retirement plan to be qualified, it must be designed for the benefit of

Employees.

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?

15 days

What is the limiting age for dependent children of the insured employee in a group life plan (other than disabled children)?

26

The minimum number of credits required for partially insured status for Social Security disability benefits is

6 credits

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

Attained age.

If a retirement plan or annuity is "qualified," this means

It is approved by the IRS.

What is the number of credits required for fully insured status for Social Security disability benefits?

40

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?

5 Years

To attain currently insured status under Social Security, a worker must have earned at least how many credits during the last 13 quarters?

6 credits

Under a contributory group plan, an insurer will require what percentage of eligible employees to be included in the plan?

75%

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?

Blanket life

What is the official name for the Social Security program?

Old Age Survivors Disability Insurance

Fully Insured

Refers to someone who has earned 40 quarters of coverage (10 years of work times 4 maximum annual credits).

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?

Vision, Inc.

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?

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

When an employee terminates coverage under a group insurance policy, coverage continues in force

For 31 Days

If an insured worker has earned 40 quarters of coverage, the worker's status under Social Security disability is

Fully Insured

In group life insurance premiums are determined by...

The age, sex and occupation of the entire group.

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?

Have accumulated 6 work credits in the past 3 years

How is Social Security funded?

Taxes imposed on a worker's earned income

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?

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

Collateral Assignment

The transfer of some or all of the death benefits of the policy to a creditor as security for a loan, but does not give the creditor the rights of ownership. In the event of the insured's death, the creditor would only be able to recover that portion of the policy's proceeds equal to the creditor's remaining interest in the loan.

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?

12 credits