markets and social security Flashcards
In an employer-sponsored group life insurance plan, the employee’s description of benefits is referred to as the:
A
Certificate of Insurance
B
Change of beneficiary form
C
Claim form
D
Master Policy
A
Certificate of Insurance
A Buy-Sell Agreement:
A
Provides a business with funds in the event of the death of a key person who is not an owner
B
Specifies the conditions and requirements that are necessary to sell the business to a third party if a business owner dies unexpectedly
C
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
D
Describes which relatives of a business owner have the right to purchase that person’s interest in the business upon death
C
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
A Buy-Sell agreement is funded with life insurance and is designed to protect the business and assure continuation by providing benefits to the surviving business partners to buy out the deceased partner share of the business.
An advantage of key person life insurance is to:
A
Provide life insurance benefits to all eligible employees and their dependents
B
Protect a partnership against the death of a partner by providing benefits to buyout a deceased partner’s share of the business
C
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
D
Provide the family of the deceased employee with up to ten years of the employee’s lost future income
C
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
Social Security monthly retirement benefits are determined using a formula that calculates which of the following?
A
FRA
B
COLA
C
FICA
D
PIA
D - PIA: Primary insurance amount
The widow or widower’s Social Security blackout period lasts until a surviving, non-remarried spouse reaches age ________.
A
65
B
60
C
62
D
50
B - 60
Which of the following best describes Third-Party Ownership?
A
A policy owned by one person insuring the life of another person
B
A business partner buying a life insurance policy on him/herself
C
A key employee buying a life insurance policy on him/herself
D
A policy owned by the insured
A - policy owned by one person insuring the life of another person
How is the funding for Social Security provided?
A
Through FICA taxes that are paid by employees
B
Through FICA taxes that are paid by both employers and employees
C
Through the PIA
D
Through FICA taxes that are paid by employers
B -
Through FICA taxes that are paid by both employers and employees
What is FICA stand for?
Federal Insurance Contributions Act
Group life insures a group of people under a _____________.
A
Certificate of insurance
B
Single contract
C
Number of policies
D
Card of insurance
B
Single contract
All are correct statements concerning noncontributory group life, except:
A
Only the plan sponsor is responsible for paying premiums
B
If employer-sponsored, an employee must work a minimum number of hours per week to be eligible
C
Premiums are calculated by underwriting each individual in the group
D
The Conversion Period is 31 days
C- Premiums are calculated by underwriting each individual in the group
Since no proof of insurability is required on the part of the plan participants, the insurer looks at the group collectively, factoring a number of variables.
Barry has just been hired by OPQ Corporation and finds that he cannot enroll for coverage under OPQ’s group health insurance plan for 30 days. This 30-day period is known as a:
A
Elimination Period
B
Policy Period
C
Deductible
D
Probationary Period
D
Probationary Period
When an underwriter evaluates the risks presented with a particular group life application, which of the following is considered the most important?
A
The plan sponsor’s credit rating
B
The sales volume of the employer
C
Group size, turnover, average age and purpose of the group
D
The overall health of the group
C
Group size, turnover, average age and purpose of the group
Buy-Sell agreements are used for all of the following entities, except:
A
Partnerships
B
Large Public Corporations
C
Sole Proprietorships
D
Closely held businesses
B
Large Public Corporations
The Buy-Sell agreement is for privately-owned entities.
To help protect against experiencing immediate claims, group plans have a(n) _______ period set up by the group sponsor.
A
Conversion
B
Open enrollment
C
Probationary
D
Elimination
C
Probationary
Which of the following is the least important when it comes to determining the cost of the group life insurance plan?
A
The health of each member of the group
B
The nature of the work involved
C
Size of the group
D
The group’ claims
A
The health of each member of the group
Since evidence of insurability is not usually required, the health of each member of the group is not used when determining premiums of the group.
