Exam 412756RR – Group Insurance
1. What is the term used to describe a situation in which an employee maintains his or her group coverage after employment is terminated?
2. Berk’s Manufacturing requires all of its nondisabled employees to retire when they become eligible for Medicare. What law is this company breaking?
A. Mental Health Parity Act
B. Social Security Act
C. Employee Retirement Income Security Act
D. Age Discrimination in Employment Act
3. Categories contained in the benefit schedule under which all employees must be sorted are called
A. eligibility determinations.
B. covered classifications.
C. insurability tiers.
D. general groups.
4. Which of the following statements concerning the traditional form of accidental death and dismemberment coverage is correct?
A. Death benefits are payable only if death occurs within 30 days of an accident.
B. Death benefits are automatically paid to the employee’s spouse if an employee is married.
C. Dismemberment benefits are usually paid for occupational accidents only.
D. Coverage usually ceases at retirement even if some or all of the basic group life insurance continues.
5. Which of the following causes of disability would be covered under a typical group short-term disability income contract?
A. Illness that allows for partial employment
B. Self-inflicted injuries
C. Injury eligible for workers’ compensation
D. Drug addiction
6. Which of the following is usually integrated with long-term disability income plans?
A. State welfare programs
B. Workers’ compensation laws
C. Individual disability income contracts purchased by employees.
D. Cafeteria plans
7. Regarding underwriting considerations, what information may an employer have to provide to an insurance company to show that the company is insurable?
A. The employees’ health histories
B. References from customers
C. The firm’s total number of employees
D. The employer’s financial records
8. The short-term disability benefits from an employer are combined with _______ to make sure that an employee doesn’t receive benefits that are more than his or her salary.
A. earnings from employment
B. pension-plan payments
C. sick-leave plans
D. workers’ compensation payments
9. Which of the following statements concerning the Pregnancy Discrimination Act is correct?
A. It allows pregnancy benefits to be excluded for female employees who are unmarried.
B. It requires benefits to be provided for elective abortions.
C. It requires that pregnancy-related medical conditions and other medical conditions be treated in the same manner for purposes of extended medical expense benefits after termination of employment.
D. It requires any female dependents of employees who have coverage under a group medical plan to be provided with benefits for pregnancy.
10. If an employee, who has $100,000 in group term life insurance, dies at the age of 67, what amount may be paid to the beneficiaries on his or her death if reductions are taken based on age?
11.Which of the following statements concerning the federal tax treatment of life insurance proceeds under a group term life insurance contract is correct?
A. The growth of group term insurance has not been affected by federal tax laws.
B. An absolute assignment of all incidents of ownership will remove the proceeds from the insured’s estate as long as the assignment is made within three years of death.
C. A spouse can exclude the first $5,000 of interest income from taxation if the proceeds are paid in installments under a settlement option.
D. No tax deduction is allowed if the employer is named as beneficiary of an employee’s life insurance coverage.
12. Which of the following statements concerning sick-leave plans is correct?
A. Traditionally, many sick-leave plans were highly regulated.
B. Surveys indicate that about 10% of employees with short-term coverage obtain benefits under sick-leave plans.
C. Most plans require an employee to satisfy a probationary period before becoming eligible for benefits.
D. Most plans are designed to provide benefits equal to no more than 50% of an employee’s regular pay.
13. Which of the following statements about the underwriting of group universal life insurance is correct?
A. Underwriting standards are not typically affected by available coverage amounts.
B. Group universal life insurance products are not typically considered for employers with less than 200 employees.
C. Most insurers require 100 percent participation.
D. Increases in the amount of coverage are often subject to evidence of insurability.
14. An employer with fewer than 15 employees might be required to offer medical insurance benefits to a pregnant employee because the
A. employer may be held responsible if the child is born with medical problems.
B. employer provides sick leave for employees.
C. state in which the employer operates requires it.
D. employer offers medical insurance benefits to nonpregnant employees.
15. What’s the primary reason for the increase in popularity of voluntary benefits in recent years?
A. State legislation that mandates benefits
B. Employers’ attempts to contain the rising costs of employee benefits
C. The federal government’s attempt to make medical expense insurance more widely available
D. Guaranteed-issue underwriting for all plans
16. The relationship between an employer and an insured multiple-employer trust is spelled out in which of the following?
A. A certificate of insurance
B. ERISA fiduciary standards
C. The master contract
D. A joinder agreement
17. If an employer has offices in New York, New Jersey, and Los Angeles, how would that employer determine which state regulations govern the group insurance contract?
A. The state with the most employees would govern the contract.
B. The state with the most stringent regulations would govern the contract.
C. The state in which the insurance contract was delivered would govern the contract.
D. Each office would abide by the requirements of its own state.
18. The provisions in disability income contracts concerning termination are the same as those found in group life insurance, with what one notable exception?
A. A conversion privilege is rarely included.
B. The employee can continue coverage by enrolling in an individual plan.
C. The employee can terminate coverage and withdraw cash value.
D. The employee can be directly billed to continue coverage at a higher expense.
19. Bob, a 10-year employee of Company X, is in the Army Reserve. Bob’s Reserve unit was called to serve overseas for three months. Company X told Bob that his position would be held for him until he returned. Bob was permanently injured, losing an arm and a foot while fighting overseas. What will happen when he returns?
A. Bob would receive no disability payments.
B. Bob would receive 100 percent of his pay after his 30 days of sick leave were used.
C. Bob would receive 100 percent of his pay from Company X as soon as he returned to the United States.
D. Bob would receive 100 percent of his pay from Company X for the first six months of his disability and 60 percent thereafter.
20. Which of the following statements concerning retired-lives reserves is correct?
A. They must be established and maintained with an insurance company.
B. Investment earnings of the reserve are usually taxed to employees.
C. Their major advantage is the ability to prefund postretirement coverage in excess of $50,000 for all employees on a tax-deductible basis.
D. If properly designed, they will enable an employer to make currently tax-deductible contributions during employees’ working years