Chapter 9. Group Life Insurance, Retirement Plans, and Social Security Disability Program Final Exam

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

100%

Group life insurance is a single policy written to provide coverage to members of a group. Which of the following statements concerning group life is CORRECT?

100% participation of members is required in noncontributory plans.

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

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

26

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

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

Which of the following is the required number of participants in a contributory group plan?

75%

When employees are covered by group insurance, they receive

A certificate of insurance

All of the following could own group life insurance EXCEPT

A group needing low-cost life insurance.

Who is a third-party owner?

A policyowner who is not the insured

All of the following are examples of third-party ownership of a life insurance policy EXCEPT

An insured borrows money from the bank and makes a collateral assignment of a part of the death benefit to secure the loan

What type of life insurance is most commonly used for group plans?

Annually renewable term

Employer contributions made to a qualified plan

Are subject to vesting requirements

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

All of the following are requirements of eligibility for Social Security disability income benefits EXCEPT

Being age 65

In terms of Social Security, what is the interval spanning between the day when the youngest child of a family turns 16 and before the surviving spouse turns age 60 called?

Blackout Period

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

In group life policies, a certificate of insurance is given to

Each insured person

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

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

An association could buy group insurance for its members if it meets all of the following requirements EXCEPT

Has at least 50 members

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

Which of the following is an eligibility requirement for all Social Security Disability Income benefits?

Have attained fully insured status

Which of the following is TRUE of a qualified plan?

It has a tax benefit for both employer and employee

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

It is approved by the IRS

An employee is joining a group insurance plan. In order to avoid having to prove insurability, what must the employee do?

Join during the open enrollment period

In a single employer group plan, what is the name of the policy issued to the employer?

Master contract

What is the official name for the Social Security program?

Old Age Survivors Disability Insurance

All of the following are characteristics of a group life insurance plan EXCEPT

There is a requirement to prove insurability on the part of the participants

Which of the following insurance arrangements will be appropriate for a parent buying a life insurance policy on a child where the parent is the policyowner?

Third-party ownership

All of the following are characteristics of group life insurance EXCEPT

Premiums are determined by the age, sex and occupation of each individual certificate holder

If an employee wants to enter the group outside of the open enrollment period, to reduce adverse selection, the insurer may

Require evidence of insurability

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

All of the following statements are TRUE concerning Debtor Groups EXCEPT

The amount of insurance on the life of any debtor may exceed the greater of the scheduled or actual amount of unpaid indebtedness to the creditor

Which of the following statements about group life is correct?

The cost of coverage is based on the ratio of men and women in the group

An employee is insured under her employer's group life plan. If she terminates her group coverage, which of the following statements is INCORRECT?

The insured may choose to convert to term or permanent individual coverage

According to California law, all of the following may be covered as dependents under group life insurance EXCEPT

The insured's elderly parents living with the insured

Which of the following are generally NOT considered when underwriting group insurance?

The insureds' medical history

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

Which of the following best describes the insurer's liability for losses arising from military service?

The insurer's liability may be reduced or excluded.

All of the following are general requirements of a qualified plan EXCEPT

The plan must provide an offset for social security benefits.

A group of 15 skydivers met at a seminar and began talking about life insurance during a break. Because it was expensive to get individual life insurance, they decided to band together to form a small group so that they could qualify for group life insurance. After they applied for group life insurance, they were rejected. Why?

The purpose of the group was to purchase life insurance

Which of the following employees insured under a group life plan would be allowed to convert to individual insurance of the same coverage once the plan is terminated?

Those who have been insured under the plan for at least 5 years

Social Security was created to provide all of the following benefits EXCEPT

Unemployment income.

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.

Which of the following is NOT a factor in determining qualifications for Social Security disability benefits?

Worker's occupation