Chapter 6 Exam - Markets and Social Security
Regarding Social Security survivor benefits, when the youngest child reaches age 16, the widow's/widower's _________ period begins and continues until the surviving (non-remarried) spouse reaches age 60.
Blackout
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:
The Conversion Period
All of the following are characteristics of Home Service (Industrial) Insurance, except:
The Grace Period is 10 days
Which of the following statements is FALSE regarding Credit Life Insurance?
The amount of coverage is dependent upon the duration of the loan
All of the following are parties to a life insurance contract, except:
The beneficiary
Which of the following is true in regard to an Entity Purchase Plan?
The business enters into an agreement to purchase the deceased's interest in the business
Under an Industrial or Home Service Contract, what is normally the face amount of the policy?
$1,000 or less
A partnership involving four equal partners is valued at $1,800,000. Under a Buy-Sell Agreement (Cross Purchase Plan), the amount of the policy on the life of each partner would be:
$150,000
Social Security pays an eligible surviving spouse (or minor child) a one-time benefit upon the death of a covered worker. Which of the following is the amount of that benefit?
$255
Generally, children receive Social Security Survivor Benefits until age ________.
18
If enrolled in an accredited elementary or secondary school, a covered child can continue receiving Survivor Benefits up to what age?
19
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?
6
The widow or widower's Social Security blackout period lasts until a surviving, non-remarried spouse reaches age ________.
60
Social Security Retirement Benefits are available as early as age _______ but are less than if paid at the normal retirement age.
62
A Social Security retirement benefit recipient will receive the greatest benefit starting at which of the following ages?
65
For those individuals who have health issues, which of the following would be an insurance plan to consider?
Group
Which of the following best describes Third-Party Ownership?
A policy owned by one person insuring the life of another person
Group Life Insurance is usually written as:
Annual Renewable Term
The Social Security Survivor Benefit is based on the Primary Insurance Amount of the:
Deceased
Credit Life insurance is usually what type?
Decreasing Term
The __________ allows an insurer to pay death benefits anyone it deems to be entitled in the absence of a designated beneficiary.
Facility of Payment Clause
In the group insurance market, under what type of plan would an insured receive an individual policy?
Franchise Plan
Group term life insurance policies have a(n) _________ premium at renewal.
Increasing
Which of the following is a requirement in order for a third-party ownership policy to be issued by a life insurance company?
Insurable interest must exist between the policyowner and the insured
Under an Entity Purchase Plan form of a Buy-Sell Agreement, the business is all of the following, except:
Insured
Under a Franchise Plan, employees would find their cost to be:
Less than the cost of an individual plan of like amount
After the blackout period has ended, the widow or widower may receive a Social Security income benefit based on the ___________.
PIA of the deceased spouse
All of the following are advantages of having a Buy-Sell Agreement in place, except:
Premiums are tax-deductible
To help protect against experiencing immediate claims, group plans have a(n) _______ period set up by the group sponsor.
Probationary
A mandatory participation rate for noncontributory group plans is designed to:
Reduce adverse selection
Lorraine's position has been terminated, and she is interested in converting her group life coverage to an individual policy. In the process, she will find all of the following to be TRUE, except:
She will be converting her group term benefit to an individual term benefit
Ultimately, who determines if a life insurance policy with an owner other than the insured will be issued?
The insurer
In terms of planning out a company's budget, what must be taken into consideration if a group life insurance plan is in place?
The insurer can increase the premium at renewal
All of the following are correct regarding Key Person Insurance, except:
The policy primarily insures the employee's retirement plan
What is the most important thing a buy-sell agreement establishes in the agreement?
The price of the business
Which of the following is a major risk to an employee covered under an employer's group life insurance plan?
The sponsor can elect to discontinue the plan
The Social Security Death Benefit is payable to the ____________.
The surviving spouse