Risk Management and Employee Benefit Review Flashcards
which of the following provides for a guaranteed death benefit?
- Variable Universal Life
- Variable Life
2 only
which of the following is true regarding Whole Life policies?
- death benefit remains level
- used for low risk tolerance clients
- premiums are level throughout policy life
- provides for lifetime coverage
all are true
which of the following is true regarding annual renewable term policies?
- the premiums will decrease as you get older
- used for long term needs
- has a fixed/level death benefit
- no cash value
3 and 4
the following statements describe which type of life insurance policy?
- appropriate for people who have higher risk tolerance
- death benefit is adjustable
- premium payments are flexible
- invests in subaccounts
Variable Universal Life
true or false?
Variable Life policies provide for flexible premium payments
false, Variable universal life policies provide for flexible payments
true or false?
annual renewable term policies should be used for short to intermediate needs
true
second to die policies have ___ costs than first to die policies
lower
second to die policies are usually used for ___
estate liquidity needs
first to die policies are usually used for ____
paying off a debt at the first spouses death
true or false?
if the employer pays the premiums on a life insurance policy for the employee and is not the beneficiary of the policy then the premium payments are deductible to the employer
true
under a fixed annuity the ____ bears the investment risk
insurer
true or false?
a fixed annuity is more appropriate for conservative investors than investors with a higher risk tolerance
true
under a variable annuity the ____ bears the investment risk
owner or annuitant
true or false?
bonus annuities usually have shorter surrender charge periods than other annuities
false, usually have longer
true or false?
bonus annuities usually have higher management fees than other annuities
true
what is the difference between a guaranteed lifetime withdrawal benefit rider (GLWB) and a guaranteed minimum withdrawal benefit rider (GMWB)?
GLWB will last for life
the practice of using misrepresentations to induce a policy owner with one insurance company to lapse, forfeit, or surrender a life insurance or annuity policy for the purpose of taking out a policy with a another insurance company
twisting
occurs when policy values of an existing life insurance or annuity contract are used to purchase another policy or contract with the same insurance company for the purpose of earning additional commissions without an objective reasonable basis for believing that the new policy will result in an actual benefit for the client
churning
what’s the difference between the own occupation definition of disability and the modified own occupation definition?
under the modified own occupation definition the insured cannot be working in order to receive benefits
which of the following will automatically qualify the insured to receive full disability benefits?
- blind
- deaf
- loss of 2 or more limbs
- loss of speach
all will automatically qualify the insured to receive full benefits
____ disability is certain conditions that automatically qualify the insured to receive full benefits
presumptive
if you disability insurance policy has an elimination period of 60 days you typically won’t receive a payment until day ___
90
a disability benefit rider that pays the difference between the original pay and current pay if the insured returns to work
residual DI rider
a disability benefit rider that provides coverage for the insured when the insured is unable to perform one or more important duties of their own occupation, but can still perform some duties
partial DI rider
type of DI policy where a right to renew the policy is guaranteed but the insurance company can increase premiums based on the policyholder’s class
guaranteed renewable
type of DI policy that guarantees the insured the right to renew until a specified age or stated number of years at a fixed level premium
noncancellable
true or false?
noncancellable DI policies are usually expensive
true
under a S corp the employer can only deduct DI premium payments to ___ and greater than ___% shareholders
partners ; 2%
true or false?
DI premiums paid for a disability buyout or buy sell agreement are deductible by the employer
false
true or false?
under a S corp DI premiums paid by the employer are included in taxable income to the partners or greater than 2% shareholders
true
true or false?
partners and 2% shareholders of an S corp will receive DI benefits tax free if the premiums were paid by the corp
true
true or false?
business overhead expense insurance is tax deductible as a business expense for the employer and are also taxable income to the business when benefits are received
true
the waiver of premium provision normally waives the premium after ___ days of disability
90
residual disability benefits are based on a ____ of lost income
percentage
true or false?
a disability policy application is more in depth than a life insurance policy application
true
____ is the dollar amount of covered benefits to which the coinsurance provision is applied and does not include the deductible
stop loss limit
_____ the maximum amount the insured pays which includes the coinsurance and deductible
maximum out of pocket
true or false?
COBRA coverage applies to plans that only provide life insurance and/or disability benefits?
false, it would not apply to a plan who only provides those things
under COBRA coverage employees and dependents are entitled to ___ months of coverage resulting from reduction in hours or normal termination
18
under COBRA coverage employees are entitled to ___ months of coverage if the employee meets the social security definition of disabled
29
under COBRA coverage employees and dependents are entitled to ___ months of coverage if the employee dies, if they get divorced, or the plan terminates
36
under COBRA coverage dependents are entitled to ___ months of coverage if the employee becomes eligible for Medicare
36
___ limits the application of preexisting condition exclusions when enrolling in a new employer’s health plan
HIPAA (1996)
HIPAA defines a preexisting condition as a medical condition for which medical advice, treatment, or diagnosis was recommended or received within ____ months prior to enrollment date in the new plan
6
true or false?
The 2010 Health Care Reform Legislation requires preventive services to be free without a deductible, co payment, or coinsurance
true
true or false?
The 2010 Health Care Reform Legislation is allowed to impose lifetime maximums and annual maximums for essential health benefits
false, neither maximum can be enforced