Group Benefits and Employee Insurance Flashcards
6 cards from real CLU practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Group Benefits and Employee Insurance flashcards as text
Under a contributory group life insurance plan, what is the minimum employee participation requirement typically required by insurers?
Answer: 75%
Most insurers require at least 75% of eligible employees to participate in a contributory group life insurance plan to prevent adverse selection.
Which provision in a group life insurance policy allows employees to convert their coverage to an individual policy without evidence of insurability when they leave employment?
Answer: Conversion privilege
The conversion privilege allows a departing employee to convert group coverage to an individual permanent policy within 31 days without proving insurability.
A Section 79 plan governs the tax treatment of employer-provided group term life insurance. What is the monthly cost per $1,000 of coverage above $50,000 taxable to the employee?
Answer: IRS Table I rates
IRC Section 79 requires employees to include the cost of group term life coverage exceeding $50,000 in gross income, calculated using IRS Table I uniform premium rates.
What is the primary purpose of a Multiple Employer Welfare Arrangement (MEWA)?
Answer: To allow small employers to pool together to purchase employee benefits
MEWAs enable small employers to join together as a purchasing pool to obtain group benefits at rates comparable to larger employers.
Under ERISA, what is the primary fiduciary duty of a plan administrator for a group life insurance plan?
Answer: Act solely in the interest of plan participants and beneficiaries
ERISA requires plan fiduciaries to act solely in the interest of plan participants and beneficiaries with the exclusive purpose of providing benefits.
Which type of group life insurance provides coverage that remains level throughout the insured's working life and does not increase with salary?
Answer: Flat benefit plan
A flat benefit plan provides the same fixed dollar amount of life insurance to all eligible employees regardless of salary or position.