Life 4

An expense loading is added to the net premium in order to do all of the following Except

penalize certain small groups of insured.

If a company has 2,000 employees eligible for a noncontributory group life insurance program, how many would be required to participate?

2000 If a group life insurance plan is noncontributory, 100% of eligible persons must be insured.

When a group plan is contributory, what percentage of employees must want and be willing to pay for coverage?

75%

All the following are true regarding business uses of individual life policies except? 1. A business can buy a life policy to insure a key executive. 2. A business can buy a policy on an executive and name the business as beneficiary. 3. The premiums on a Key-Person life policy are not tax deductible to the business. (X)4. A business can buy a group life policy on all its employees and name the business as the beneficiary.

A business can buy a group life policy on all its employees and name the business as the beneficiary.

When converting a group life policy to an individual policy, the departing group member's new policy must be

A permanent or whole life policy

A rollover refers to which of the following?

A transfer of funds from an IRA to another qualified type account.

If a group insurance plan is noncontributory

All individuals become immediately covered after completing the probationary period

A term used in referring to retirement accounts is vesting and this relates to? 1. Defining the time at which the retirement account belongs to the employee. 2. Defining the time at which the employee may withdraw funds from the account if employment is terminated. 3. IRS rules concerning the length of time before it must belong to the employee. (X)4. All the above are true.

All the above are true

The coverage type most often used with Group Life insurance is?

Annually renewable term

The Fair Credit Reporting Act guarantees which of the following?

Applicants' right to information held about them by any reporting agency

With regard to life insurance policies, loading refers to

Assignment of the appropriate share of the company's operating expenses to each policy

The time period between when a widow can collect Social Security benefits after the last child is beyond the age limit allowing the widow to collect survivorship benefits to is known as:

Blackout Period

A split-dollar plan

Divides the cost of additional insurance for an employee between that employee and the company

The type of insurance that provide life insurance automatically for Federal employees unless they choose not to be included in the plan is

FEGLI

The premium that reflects mortality rates, assumed interest, and the policy's share of the company's operating expenses is called the

Gross premium

When underwriting group life insurance

The underwriter generally focuses on the group as a whole, rather than on individual members

A local pipefitters and brick masons union work together to create a trust to provide insurance to their employees. This type of trust is called:

a Taft-Hartley trust. A Taft-Hartley trust is formed by employers in related industries in order to provide healthinsurance to their employees.

An applicant that does not meet normal underwriting standard may be insured by some insurers by

accepting a rated or rated up policy with higher premiums.

A group life policy will generally have all the following except?

be whole life insurance

Jim is a 56 year old engineer with a wife and 3 children,he has a 20 year level premium term policy with a $300.00 monthly premium.He is considering early retirement and is maximizing his tax deductible retirement contributions,if Jim leaves his job he

can convert it to permanent insurance without proof of insurability, within 30 days of leaving his employment

Which of the following statements regarding the Medical Information Bureau is NOT true? a. It must be authorized by the applicant to give information to member companies b. It supplies member companies with information concerning insurability of proposed insureds c. It is a nonprofit agency established by insurance companies to aid their underwriting (X)d. It is not obligated to supply applicants with information it holds about them

d. It is not obligated to supply applicants with information it holds about them

An application for group coverage is signed by the

employer, who then receives and retains a master policy

A rated policy will

have higher premiums

Group insurance plans where the premium is paid by both the employer and employee is called:

In a contributory plan, the premium is paid by both the employer and employee. At least 75% of all eligible employees or members must be covered.

The Lucrative Lozenge Company provides a $5,000 monthly income to retirees who served as senior executives. This benefit is not available to other retirees of the company. This is an example of a

Nonqualified plan

Each of the following is a factor in computing the premium for a life insurance policy EXCEPT a. Operating expenses b. Investment experience (X)c. Number of anticipated policy owners d. The mortality rate

Number of anticipated policy owners

The Medical Information Bureau is a nonprofit organization supported by

Insurance companies

In group insurance, the evidence of a contract between the insurer and the employer or association

The policy

If the insurance company accepts a special class risk

The premium will be higher than for a normal risk

Ford begins work on March 18 at the Watts Electric Company. Watts offers noncontributory group life insurance to its employees after a probationary period and provided the other usual requirements are met. If the probationary period is the usual length, Ford will be eligible for group life insurance on

June 18

All of the following are alternatives an insurer has when asked to insure a substandard risk EXCEPT a. Charge a higher than standard premium b. Attach a rider to the policy excluding certain coverages or conditions c. Reject the risk (X)d. Issue the policy with a probationary period after which the insurer may continue or cancel the policy

(X)d. Issue the policy with a probationary period after which the insurer may continue or cancel the policy

In underwriting group insurance, companies use all of the following underwriting guides to guard against adverse selection EXCEPT: (X)medical examinations. minimum participation rules. benefits determined by formula. careful group selection.

medical examinations.

The portion of the premium that is based only on mortality rates and assumed interest is called the

Net premium

All of the following statements pertaining to the conversion privilege of group term life insurance are correct EXCEPT: an insured employee typically has 31 days following termination of employment in which to convert the group insurance. (X)when a group plan is terminated, group coverage of the insureds generally is extended for 60 days. insureds who convert their coverage to individual policies pay a premium rate according to their attained age. a covered individual may exercise the conversion privilege regardless of his or her insurability.

When a group plan is terminated, group coverage of the insureds generally is extended for 31 days.

All the following statements concerning Group Life on employees is correct except? (X)1. They are not tax deductible to the employer. 2. If the coverage is $50,000 or less the premiums are not taxable to the employee. 3. They are considered a normal business expense. 4. Noncontributory groups do not require employees to pay any premiums.

They are not tax deductible to the employer.

A certificate of insurance in a group life insurance plan:

is issued to each employee covered under the group life insurance plan Group life insurance plans issue a master certificate or master policy to the business owner and issues certificates of insurance to covered employees. The certificate of coverage shows the coverage benefits and is proof of coverage.