Chapter 6 Life Flashcards Preview

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Flashcards in Chapter 6 Life Deck (8):
1

A noncontributory group term life plan is characterized by

The entire cost of the plan is paid for by the employer. When an employer provides noncontributory group term life insurance, the employer pays the entire cost of the plan.

2

An employee of 20 years recently retired at age 59 1/2. This employee's group life contract can be

Converted to an individual permanent policy at an individual rate

3

Under federal tax laws, what is the tax treatment for an employer providing $50,000 of a contributory group Term Life plan to all its eligible employees?

Portion of the premiums paid for by the employer may be a tax deduction. In a contributory plan, the employer may file a tax deduction for its share of the premium costs.

4

The percentage of eligible employees participating in a non-contributory plan MUST be

100%

5

Employees covered by an employer-sponsored group Term Life Insurance plan receive

Certificates of insurance

6

Which of the following is an important underwriting principle of group life insurance?

Physical examinations are required

Everyone must be covered in the group

Employer must pay for the entire premium

The group must be formed for the purpose of getting affordable insurance

Everyone must be covered in the group

7

When an employee is terminated, which statement about a group term life conversion is true?

Employee must convert group term life coverage into an individual term life policy

Employee must provide evidence of insurability for conversion

Policy proceeds will be paid if the employee dies during the conversion period

olicy proceeds will NOT be paid if the employee dies during the conversion period

Policy proceeds will be paid if the employee dies during the conversion period. An individual must apply for individual coverage within 31 days after the date of group coverage termination. An individual is covered under the group policy during the conversion period.

8

Under federal tax laws, what is the tax treatment for an employer providing $50,000 of a contributory group Term Life plan to all its eligible employees?

Portion of the premiums paid for by the employer may be a tax deduction