Life and Health Questions-Life 4

The coverage type most often used with Group Life insurance is? 1. Annually renewable term 2. Term to age 65 3. Pay to 65 Straight Life 4. Straight Life

1. Annually renewable term

All the following statements concerning Group Life on employees is correct except? 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.

1. They are not tax deductible to the employer.

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

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

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. 4. All the above are true.

4. All the above are true.

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: a. Blackout Period b. Delayed Benefit Period c. Widow's Benefit d. Post Payment Period

a. Blackout Period

When converting a group life policy to an individual policy, the departing group member's new policy must be a. A permanent or whole life policy b. An annuity c. An endowment d. A term life policy

a. A permanent or whole life policy

A rollover refers to which of the following? a. A transfer of funds from an IRA to another qualified type account. b. Taxation of withdrawals from a modified endowment contact c. Contributions made by employees to a group life policy d. Change from a standard to a substandard risk

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

The premium that reflects mortality rates, assumed interest, and the policy's share of the company's operating expenses is called the a. Gross premium b. Net premium c. Standard premium d. Earned premium

a. Gross premium

The Medical Information Bureau is a nonprofit organization supported by a. Insurance companies b. State governments c. The federal government d. All of the above

a. Insurance companies

In group insurance, the evidence of a contract between the insurer and the employer or association a. The policy b. The policy of certification c. The certificate of policy d. The certificate of insurance

a. The policy

A rated policy will a. have higher premiums b. have lower premiums c. be the same as standard rates d. be subject to audits

a. have higher premiums

When a group plan is contributory, what percentage of employees must want and be willing to pay for coverage? a. 50% b. 75% c. 100% d. The percentage depends on the size of the group

b. 75%

With regard to life insurance policies, loading refers to a. The source of dividends the company pays to those holding participating policies b. Assignment of the appropriate share of the company's operating expenses to each policy c. The amount the company must keep on hand to meet its policy obligations d. Assignment of the appropriate share of the company's mortality rate to each policy

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

The type of insurance that provide life insurance automatically for Federal employees unless they choose not to be included in the plan is a. SGLI b. FEGLI c. TRICARE d. CHAMPUS

b. FEGLI

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 a. July 18 b. June 18 c. March 25 d. March 18 of the following year

b. June 18

If the insurance company accepts a special class risk a. The premium will be the same as for a normal risk b. The premium will be higher than for a normal risk c. The premium will be lower than for a normal risk d. It then normally writes insurance for that risk in small benefit amounts

b. The premium will be higher than for a normal risk

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 a. does not have a conversion option in his group life policy since he has his own coverage b. can convert it to permanent insurance without proof of insurability, within 30 days of leaving his employment c. can only convert a portion because he has maximized his retirement contributions d. can add his group coverage to his term policy if done within a specified period of time.

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

The Fair Credit Reporting Act guarantees which of the following? a. Equitable insurance rates b. Full disclosure of policy benefits c. Applicants' right to information held about them by any reporting agency d. Full disclosure of an insurer's financial condition

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

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 a. Defined contribution plan b. Qualified retirement plan c. Nonqualified plan d. Profit-sharing plan

c. 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 c. Number of anticipated policy owners d. The mortality rate

c. Number of anticipated policy owners

An expense loading is added to the net premium in order to do all of the following Except a. Spread cost equally among insureds b. Have funds for expenses when needed c. penalize certain small groups of insured. d. Cover all expenses and contingencies

c. penalize certain small groups of insured.

If a group insurance plan is noncontributory a. Individuals become immediately covered after completing the eligibility period b. Individuals must complete the probationary period and then enroll during the eligibility period to avoid medical underwriting c. Individuals must complete the eligibility period and then enroll during the probationary period to avoid medical underwriting d. All individuals become immediately covered after completing the probationary period

d. All individuals become immediately covered after completing the probationary period

A split-dollar plan a. Divides the cost of purchasing a business interest b. Insures the lives of valuable employees in order to compensate the company in the event of their unexpected death c. Will provide additional compensation to an employee at some future date, usually retirement d. Divides the cost of additional insurance for an employee between that employee and the company

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

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

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

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 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

The portion of the premium that is based only on mortality rates and assumed interest is called the a. Gross premium b. Earned premium c. Standard premium d. Net premium

d. Net premium

When underwriting group life insurance a. The underwriter generally focuses on individual members of the group, rather than the group as a whole b. The underwriter generally requires extensive medical information from the group c. The underwriter generally requires extensive medical information from each individual d. The underwriter generally focuses on the group as a whole, rather than on individual members

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

An applicant that does not meet normal underwriting standard may be insured by some insurers by a. going into the preferred risk group. b. reporting the rejection to the insurance commissioner. c. applying to the Federal government for coverage. d. accepting a rated or rated up policy with higher premiums.

d. accepting a rated or rated up policy with higher premiums.

A group life policy will generally have all the following except? a. be associated with ones employment b. have benefit levels set by the master contract c. be term insurance d. be whole life insurance

d. be whole life insurance

An application for group coverage is signed by the a. Employer who then receives individual policies to distribute to each individual insured b. Individual insureds, who then receive individual policies c. Individual insureds, but a master policy is issued to the employer d. employer, who then receives and retains a master policy

d. employer, who then receives and retains a master policy