Insurance Ch 9

Question 1

A group ________ policy does not meet the requirements to be treated as a group term life insurance.

The employee will be taxed on the premiums paid by the employer, if the proceeds are payable to __________. The premiums are_______ by the employer.

Answer 1

Permanent / the beneficiary name by the employee / deductible

Question 2

An employee spouse may be covered for more than a $2000 death benefit, but only $2000 can be a _____.

Answer 2

Tax free employee benefit

Question 3

Group term life insurance is a benefit provided by an employer to a group of participating employees. Employees are generally not taxed on premiums paid by the employer if their total coverage does not exceed ______ .

Answer 3

$50,000

Question 4

The exclusion of the first $50,000 is available to a key employee only if the group life plan ______ discriminate in favor of key employees as to eligibility to participate in the type and amount of benefits.

Answer 4

Does not

Question 5

If the group life plan is discriminatory, each key employee must include the ______ of the actual cost of insurance, or the cost determined from table one on an annual basis.

Answer 5

Greater

Question 6

The non-key employees _______ the $50,000 exclusion even in a discriminatory group life plan.

Answer 6

Retain

Question 7

In a discriminatory group term policy, the key employees _____ the $50,000 exemption.

Answer 7

Lose

Question 8

With group permanent life insurance, the employer can deduct the premiums only if the employee’s right to the insurance on his life is ________.

Answer 8

Nonforfeitable.

Question 9

Group life insurance is usually offered as a flight amount for all employees, or as a multiple of salary. Although the employer owns the policy, the employee names the beneficiary. The ability to name the beneficiary causes the death benefits to be ______ in the employee’s estate.

Answer 9

Included

Question 10

________ include the right to name or change the beneficiary, the right to convert the policy, and the right to terminate the coverage.

Answer 10

Incident of ownership

Question 11

With the group term, life, if employees complete an absolute assignment during their lifetime, they will be deemed not to have retained any incident of ownership. After _____, the death benefits will be excluded from their estate.

Answer 11

Three years

Question 12

Any employee whose group life insurance coverage ceases has the right to convert to an individual life insurance policy. The conversion does not require proof of insureability. Conversion can be made to any type of _____.

Answer 12

Permanent plan

It cannot be term insurance.

Question 13

Generally, the employer pays 100% of the group disability premium (noncontributory). The employer _____ the premium. Disability benefits, received by the employee are considered _______.

Answer 13

Deeded/taxable income

Question 14

Insurance carriers will normally issue a group disability policy that provides 50 to 60% of earned income. One way for an individual to obtain more coverage is to ______ before enrolling in a group plan.

Answer 14

Purchase an individual policy

Question 15

Disability benefits, received from Social Security generally ______ group, disability, insurance benefits.

Answer 15

Reduce

Question 16

The Social Security administration, definition of disability requires a mental or physical impairment that prevents the worker from engaging in any substantial employment. The disability must have lasted or be expected to last, at least ____ or _______

Answer 16

12 months/result in death.

Question 17

Social Security disability benefits are subject to a _______ waiting. And payable beginning with the _____ full calendar month of disability.

Answer 17

Five month/6th