Insurance MCQ

How does underwriting differ between group life and individual life insurance? A) Group life insurance normally charges a higher premium B) Individual life insurance is normally written as an annually renewable term policy C) Individual life insurance can normally be converted to group life insurance D) Medical questions must be answered on individual life insurance Answer: D) Medical questions must be answered on individual life insurance

Converting a group plan to permanent life insurance requires A) submitting proof of insurability B) paying a lower premium C) converting to term life insurance D) the conversion being applied for within 31 days of termination Answer: D) the conversion being applied for within 31 days of termination

The conversion privilege under a group life plan allows an employee to convert to a(n) A) family plan with another insurer B) individual plan with another insurer that has better rates C) individual plan upon employment termination D) individual policy in the spouse's name Answer: C) individual plan upon employment termination

Which of the following is NOT a characteristic of the conversion privilege? A) Ex-employee pays the premium for the converted policy B) Proof of insurability is not required C) Employer pays the premium for the converted policy D) Conversion must take place within 31 days of employment termiation Answer: C) Employer pays the premium for the converted policy

All of the following are characteristics of a Group Life Insurance Plan EXCEPT A) Group underwriting B) Master contract C) Individual underwriting D) Probationary period Answer: C) Individual underwriting

Which of these factors would an insurer consider when determining whether to accept a group life plan? A) Number of dependents B) Incontestable period C) Average age D) Grace period Answer: C) Average age

Employee participation in a noncontributory group life plan must be A) 25% B) 50% C) 75% D) 100% Answer: D) 100%

All of the following are considered characteristics of group life insurance, EXCEPT A) certificates of insurance B) conversion privilege C) individual policies D) master policy Answer: C) individual policies

The coverage, conditions, and limitations in the master policy of a group contract can be found in which document? A) Certificate of Authority B) Consumer report C) Coverage document D) Certificate of coverage and benefits Answer: D) Certificate of coverage and benefits

Which of the following describes a contributory group insurance plan? A) All of the premium is paid by the employer B) Part of the premium is paid by the employee C) Employees are eligible for policy dividends D) Federal government contributes a portion of the employee's premium Answer: B) Part of the premium is paid by the employee

Tim was recently terminated from his employment and opted to change his existing group term life insurance to individual permanent life insurance. What is this process called? A) Replacement B) Conversion C) Transformation D) Reinstatement Answer: B) Conversion

How is the cost of employer-provided group life insurance with coverage amounts above $50,000 treated for tax purposes? A) Tax deductible to the employee B) Partially taxable to the employer C) Fully taxable to the employer D) Taxable income to the employee Answer: D) Taxable income to the employer

Which of the following is NOT a requirement for a terminated employee that has exercised the conversion privilege? A) Convert within 31 days B) Convert up to the previous amount of group coverage C) Provide proof of insurability D) Premium must be paid Answer: C) Provide proof of insurability

Who are the parties to the master contract in a group life insurance policy? A) Insurer and employee B) Employer and employee C) Insurer and employer D) Employer and beneficiary Answer: C) Insurer and employer

A terminated employee that has exercised the conversion privilege is able to convert A) only after providing evidence of insurability B) without paying for the premiums C) permanent insurance into term insurance D) term insurance into permanent insurance Answer: D) term insurance into permanent insurance

Who is issued a certificate of insurance with a group insurance policy? A) Policyholder B) Insurance company C) Participant D) Third-party adminstrator Answer: C) Participant

Employer-provided group term life insurance is exempt from income taxation up to A) $10,000 B) $25,000 C) $40,000 D) $50,000 Answer: D) $50,000

An employee under a group insurance policy has the right to name a beneficiary and the right to A) remain on the group plan in the event of employment termination B) cash surrender the existing policy C) change the policy provisions D) convert to an individual policy in the event of employment termination Answer: D) convert to an individual policy in the event of employment termination

A non-contributory health insurance plan helps the insurer avoid A) adverse selection B) state compliance C) the underwriting process D) tax deductions Answer: A) adverse selection

Under a group life policy, the insurer will issue an individual _____ to the policyowner for delivery to each person insured. A) policy B) certificate C) application D) rider Answer: B) certificate