Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

LOMA 311- ISTAR > Chapter 15 > Flashcards

Chapter 15 Flashcards

1
Q

what do you call a group insurance contract what provides coverage to a number of people known as the group insured’s?

A

Group master contract.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What do ou call the employer or other party that purchased the group insurance contract?

A

the group policy holder.

They have legally enforceable rights under the contract.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What do you call the document that provides a description of the group insured’s coverage and outlines the group insure’s rights under the group master contract?

A

Certificate of insurance.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

In terms of group insurance; define enrollment.

A

The procedure by which an eligible group member signs up for group insurance coverage

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

In terms of group insurance; define probationary period

A

the period of time (1-6 mo) that a new group member must wait until becoming eligible to enroll in a group insurance plan

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

In terms of group insurance; define eligibility period

A

the period of time (usually 31 days) following the probationary period during which a new group member may first enroll for group insurance coverage

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

In terms of group insurance; define late entrant

A

an eligible group member who enrolls for group insurance coverage after the expiration of the eligibility period. They myst generally provide satisfactory evidence of insurability to enroll for group insurance coverage

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

In terms of group insurance; define open-enrollment period

A

a specified period during which group members who did not enroll during their eligibility periods may enroll for group insurance coverage without providing evidence of insurability.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What requirements must be met for the formation of an individual life insurance contract (group/individual)?

A
  1. mutually assent to the contract
  2. exchange legally adequate consideration
  3. have contractual capacity
  4. meet the lawful purpose requirement.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

NAme the 7 types of groups that are eligible for group life insurance

A
  1. single-employer groups
  2. Labor union groups
  3. Multiple-employer groups
  4. Association groups
  5. debtor-creditior groups
  6. credit union groups
  7. discretionary groups
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Federal laws prohibit employers from paying funds directly to a labor union for any purpose. How are payments made>?

A

to a trust fund established for the purpose of providing benefits to employers.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What are 3 common types of association groups in the united states?

A
  1. professional association
  2. public employee association
  3. common interest association
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What do you call the life insurance issued to a debtor-creditor

A

credit life insurance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What sets credit life insurance apart from other group life insurance product?

A
  1. sold by lenders
  2. maximum limits on the amount of credit issued.
  3. requires to give 30-day look over period and right to cancel coverage at any time
  4. special information must be disclosed to debtors
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What is the one beneficiary restriction on group insured policies?

A

The group insured generally cannot name the group policyholder as the beneficiary.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Who is the beneficiary when the policy is issued to a creditor to insure the lives of its debtors?

A

The creditor is both the gorup policy holder and the beneficiary. The benefit is paid to reduce or extinguish the group insured’s unpaid in debteness to the creditor.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

For every group life insurance plan, who is responsible for remitting premiums to the insurer?

A

The group policyholder

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

What is a contributory plan?

A

A group insurance plan under which the group insureds pay all or part of the cost for their coverage.
- eligible group members must be given the choice of whether to participate, and they must authorize the payment of their premium contributions.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Define a noncontributory plan

A

a group insurance plan under which the employer or group policyholder pays the entire cost for the coverage.
-All eligible group members must be covered.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

NAme 4 contract provisions that are a lot alike individual life insurance, that must be included in a group insurance contract

A
  1. grace period provision- 31 days
  2. incontestability provision.
  3. an entire contract provision
  4. a misstatement of age provsion-
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Name 2 provisions that are exclusive to group insurance contracts

A
  1. evidence of insurability provision= right to require a person eligible for insurance to provide evidence
  2. Conversion provision- give group insured right to obtain an individual life policy if the group insurance terminates
  3. list of who is eligible to be covered under the policy
  4. the actively-at-work provision
  5. probationary period provision
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

What is the actively-at-work provision?

A

states that an employee must be actively at work, not ill or on leave, on the day coverage becomes effective.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

What is the probationary period provsion

A

a provision that specifies the length of time (1-6 months) that a new employee must wait before becoming eligible to enroll in a group life insurance plan.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

What is the eligibility period

A

a period of time, (31 days) during which a new employee may enroll for group life insurance coverage.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

What are 3 situations in which the group insurance coverage can terminate even through the group life insurance contract is in force?

A
  1. the group insured terminates ger employement or group memebership
  2. group insured ceases to be eligible for coverage
  3. group insurance does not make a required contribution to the cost of coverage.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

What is the employee Retirement Income Security Act (ERISA)

A

A U.S. federal law designed to ensure that employee welfare benefit plans meet certain minimum plan requirements to protect covered employees.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

What is a welface benefit plan?

A

a plan that en employer established to provide the specified benefits to plan participants and their beneficiaries.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

What are the employee benefits that subject a welfare benefit plan to ERISA?

A
  1. medical/surgical/hospital care benefits
  2. sickness, accident, disability or unemployment benefits
  3. vacation
  4. day care
  5. scholarship funds
  6. prepaid legal services
  7. apprenticeship or training programs
  8. benefits that include severance benefits and housing benefits
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

Erisa requires that welfare benefit plans be established and maintained according to a written document. What is on this document.

A
  1. benefits that are provided by the plan
  2. how the plan will be funded
  3. the procedure that will be followed to amend the plan.
30
Q

Who is the plan administrator?

A

the individual or organization responsible for ensuring that the plan complies with applicable regulatory requirements.

31
Q

What is a summary plan description?

A

an abbreviated version of the plan document that is understandable by the average plan participant and that reasonably informs participants and beneficiaries of their rights and obligations under the plan.

32
Q

True or False: ERISA requires that an annual report be filed with the Interview Revenue Service?

A

True `

33
Q

What is the Age discrimination in Employment Act? (ADEA)

A

A federal law that protects workers who are age 40 and older from being discriminated against because of their age.
-act requires that employer’s premium contributions are the same for older as they are for younger people

34
Q

What is the American with Disabilities Act (ADA_

A

a federal law that protects people with disabilities against all types of discrimination, including employment discrimination.
- insurance available to those with disabilities.

35
Q

What is a qualified plan?

A

group retirement plans that receive favourable federal income tax treatment because they meet specified requirements imposed by the federal tax laws and ERISA.

36
Q

Who are the plan sponsors?

A

the employers and unions that establish the plans

37
Q

who are the plan participants?

A

the employees and union members who are covered under the plan.

38
Q

Who are the plan beneficiaries ?

A

are individuals specified by plan participants to receive retirement benefits provided by the plan if the plan participant dies.

39
Q

Each retirement plan can be further categorized into what type of defined plans?

A
  1. defined benefit plan

2. defined contribution plan

40
Q

describe a defined benefit plan

A

a type of retirement plan that specifies the amount of the periodic income benefit- based on the employees salary or wages and/or years of service.- that a participant is to receive after retirement.

41
Q

describe a contribution plan

A

specifies the annual contribution that the plan sponsor will deposit into the plan on behalf of each plan participant

42
Q

What is a contribution?

A

a payment from any source to fund the plan’s benefits.

- usually a % of a plan participants salary or wages.

43
Q

Name 3 types of qualifies retirement plans in the united states.

A
  1. pension plan
  2. retirement savings plan
  3. profit sharing plan.
44
Q

What is meant by perticipation requirements for retirement plans?

A

Refers to the inclusion of an individual in a retirement plan.

45
Q

Qualifies retirement plans must contain which participation standards?

A
  1. the plan cannot require that an employee complete a period of service beyond one year or be older than 21 to participate in the plan, which every happens later.
  2. Cannot exclude employee’s who have attained a specified maximum age
  3. Defined benefit plans must meet minimum requirements as to number of participants
46
Q

Who requires qualified retirement plans to be established and maintained in accordance with a written plan document that describes the benefits to be provided, how the plan will be funded, and the procedure that will be followed to amend the plan.

A

ERISA

47
Q

When is a plan participant considered Vested?

A

when he has the right to receive partial or full benefits under the plan even if he terminates employment prior to retirement.

48
Q

What are 3 general requirements that are imposed to ensure that qualified retirement plans do not unfairly discriminate in favor of employees who are “highly compensated”

A
  1. contributions or benefits may not discriminate in favour of highly compensated employees.
  2. plan benefits, rights, and features must be made available to employees in a nondiscriminatory manner.
  3. the effect of plan amendments and plan terminations must be nondiscriminatory
49
Q

What is a top-heavy plan?

A

plans under which, for a given plan year, the present valye of accrued beenfits for key employees exceeds a specified percentage of the present value of accrued benefits for all employees.

50
Q

What are distributions in terms of qualified retirement plans?

A

benefits paid to plan participants, usually following retirement.

51
Q

In general when do distributions begin?

A

by april 1st, when the participant reaches age 70 1/2, even if they are still employed at the time

52
Q

Are the assets of a retirement plan helf with the plan sponsor’s general assets? In terms of finance

A

No, they can seperate it by allowing the retirement assets to be held by a bank, a life insurance company under various contracts desginated for this purpose, or another financial institution.

53
Q

What is the financial institution in which a group retirement plan’s assets are held?

A

funding Agency.

54
Q

What is a funding instrument?

A

is an arrangement for investing group retirement plan assets.

55
Q

How would a plan sponsor choose a funding instrument?

A

based on how it wants the plan administered and the amount of flexibility available in the plan desgin.

56
Q

What are the two most common type of funding instruments for qualified retirement plans? And which is more common out of the two?

A
  1. trusts (most common)

2. group insurance contracts.

57
Q

Plan trustees may be required to perform what 4 duties?

A
  1. receiving and investing employer contributions
  2. providing periodic reports to the plan sponsor
  3. paying benefits under the plan
  4. maintaining the appropriate admin records.
58
Q

What terms are specified in a trust agreement?

A

receipt
investment
disbursement of retirement plans assets’

59
Q

In some plans, who else besides the plan trustee may be responsible for investing plan assets?

A

investment managers

60
Q

Group insurance contracts used to fund qualified plans can be classified as what two sub contracts?

A

allocated
and unallocated.
The classification focuses on how plan contributions are accumulated and how they are used to satisfy the claims

61
Q

Allocated contracts have individually assigned participant accounts, and emokoyer contributions to the plan are assigned to individual plan participants. What kind of contracts would this include? (examples)

A
  1. individual life insurance and annuity contracts
  2. group perm life insurance
  3. group deferred annuity contracts
62
Q

When a plan is funded through unallocated contracts, funds are held in one account and are undivided with respect to plan participants; beneifts are then paid from that acound. What kind of contract examples would this include?

A
  1. group desposit administration (DA)

2. immediate participation guarantee (IPG) contracts

63
Q

What is a group deposit administration (DA) contract?

A

a type of contract underwhich contributions are deposited in an undivided accoutn and are used to purchase signle-premium imediate annuities for plan participants when they retire

64
Q

What is an immediate participation guarantee (IPG) contract?

A

a type of contract under which plan contributions are deposited in an undivided account and the plan sponsor will
1. withdraw funds to purchase an immediate annuity when a plan participant retires
or
2. pay the participant monthly retirement benefits direct from the account.

65
Q

retirement plan administration duties can be divided into which two categories?

A
  1. administrative duties (for participants by plan admins(

2. fiduciary duties (may include admin duties and asset mangement duties)

66
Q

Name some duties of a plan administrator

A
  1. enroll new employees in the plan
  2. communicating plan changes to participants
  3. mainting hiring, participation and termination records of participants
  4. acting as a resource for plan participants regarding matters dealing with the plan
67
Q

What is the purpose of requiring a name fiduciary?

A

to give plan participants the name of at least one individual who is responsible for the admin and operation of the plan.

68
Q

Name 3 duties of a fiduciaries

A
  1. exercising discretionary authority or control over the mangement of the retirement plan or over assets held under the plan
  2. exercising any discretionary auth or responsibility in the admin of the plan
  3. rendering investment advice for direct or indirect compensation.
69
Q

In what situation would a fiduciary be held liable for the breach of a cofiduciary?

A
  1. when they knowingly participate in or conceals a breach by the cofiduciary
  2. they have knowledge of a breach by a codiduciary and does not take steps to correct it
  3. they fail to comply with ERISA, and this failure enables a cofiduciary to commit a breach
70
Q

what is plan termination?

A

described as the ending of a group retirement plan when plan benefits cease to accrue.

71
Q

What is a partial plan termination?

A

occurs when a plan sponsor terminates a retirement plan for one group of plan participants but continues the plan for another group of plan participants.

LOMA 311- ISTAR (15 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions