General Insurance Ch 6

For those individuals who have health issues, which of the following would be an insurance plan to consider?

Group

A Buy-Sell Agreement:

Assures the continuation of the business by providing benefits to the surviving business partners to buyout a business partner's interest in the event one of them dies unexpectedly

In an employer-sponsored group life insurance plan, the employee's description of benefits is referred to as the:

Certificate of Insurance

Social Security monthly retirement benefits are determined using a formula that calculates which of the following?

PIA

With a Contributory Group Life Plan, what percentage of the employees must participate?

75%

All of the following are characteristics of Group Life Insurance, except: A Evidence of insurability is usually not required B Group is typically written utilizing Permanent Insurance C Claims are not contestable after an employee has been covered for 2 years D Most states require a minimum number of enrollees at date of issue

B Group is typically written utilizing Permanent Insurance

Which of the following is a characteristic of a contributory plan?

Eligible employees pay a portion of the premium

An advantage of key person life insurance is to:

Provide the owner of the policy with funds to recruit and train a replacement employee upon the death of an employee who contributes substantially to the success of a company

Which of the following is the least important when it comes to determining the cost of the group life insurance plan?

The health of each member of the group

A grandparent purchases a life insurance policy on their granddaughter. This is an example of _________.

Third-Party Ownership

To be fully insured for Social Security, generally a person must have worked and paid into the Social Security system for a minimum of ______ years.

10

All of the following are typically what key employee life insurance proceeds are used for, except to: A Hire a replacement B Train a replacement C Recruit a replacement D Close down the business

D Close down the business

Buy-Sell agreements are used for all of the following entities, except: A Sole Proprietorships B Partnerships C Closely held businesses D Large Public Corporations

D Large Public Corporations

A mandatory participation rate for noncontributory group plans is designed to:

Reduce adverse selection

Which of the following is NOT true regarding a group insurance plan?

Proof of insurability is required to be eligible

In an employer-sponsored group life insurance plan, the employee has control over which of the following?

Naming a beneficiary

To have Currently Insured status under Social Security, a worker must have at least _____ quarter credits during the 13-quarter period ending with the quarter in which the worker dies, becomes disabled, or reaches retirement age.

6

L is no longer eligible for the employer's $50,000 group life insurance plan. L dies 28 days later without sending in the required conversion paperwork. What will their beneficiaries receive?

$50,000, less any premiums due (The conversion period is also a grace period)

As part of Social Security benefits, a one-time payment of $_______ may be made paid to a surviving spouse after a taxpayer's death. A

255

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: A If she waits until the eligibility period has closed, the insurer may require evidence of insurability to reduce adverse selection B She will be converting her group term benefit to an individual term benefit C She has 31 days of eligibility to convert to the private plan without having to prove insurability D The premium will be higher than the group premium

She will be converting her group term benefit to an individual term benefit

How are employee FICA taxes collected?

The employer withholds the employee's tax and pays it along with the employer's portion