CEBS - GBA 1 - Practice Exam Questions with 100% Correct
Answers Latest Graded A+
Question:
Which of the following statements correctly describes minimum requirements that group benefit
plans typically must meet in order to be prospectively rated on contract renewal?
Answer:
The more unpredictable the event that will trigger a claim, the larger the minimum group size and
premium requirements
Question:
Which of the following statements correctly describes the term graduation as it applies to mortality
tables?
Answer:
It is a mathematical process that removes anomalies that should not appear in the mortality data
Question:
If the plan sponsor pays the premium, which of the following group insured benefits is taxable to
the plan member?
Answer:
Long-term disability (LTD)
Question:
Which of the following statements correctly describes phases of a group plan marketing?
Answer:
Plan features of both contributory and noncontributory benefit plans must be communicated to plan
members during the enrollment process
Question:
Which of the following statements correctly describes a characteristic of an insurable risk?
Answer:
The loss must have financial significance to the insured (The loss must not be catastrophic to the
insurer. Option C: The loss must occur by chance. Option D: The loss must be predictable for the
,insurer.)
Question:
With respect to marketing a group insurance plan, which of the following statements best describes
insurer representatives known as account executives?
Answer:
They are involved in enrolling group members and installing new plans
Question:
Which of the following statements correctly describes the statistical concept known as the law of
large numbers?
Answer:
Future probabilities of loss are not valid unless a large number of incidents exist to ensure the
outcomes are less likely to deviate
Question:
Which of the following statements correctly describes an insured plan that is insurer- administered?
Answer:
For self-insured plans with an administrative services only (ASO) arrangement, the insurer bills the
plan sponsor monthly for administration fees
Question:
If the probability that an individual will live one year is 0.95 and the probability of dying in the
following year is 0.10, what is the probability that an individual will survive both years?
Answer:
0.855 (P (Survive both years) = (0.95) x (1 - 0.1) = 0.95 x 0.90 = 0.855.)
Question:
Which of the following statements correctly describes the group benefits enrollment process for
new employees?
Answer:
An employee can enroll in the plan any time between his or her date of hire and the end of a
waiting period
, Question:
A type of service offered under a third-party administrators (TPAs) claims settlement only
arrangement is:
Answer:
Adjudicating and paying claims
Question:
Unless otherwise specified in the group insurance contract, a plan member's status under a group
benefits plan terminates the earliest at which:
Answer:
The plan member retires (Unless otherwise specified in the group insurance contract, the order in
which coverage terminates is effective the earliest date the plan member retires, the plan member's
service with the plan sponsor is terminated, the plan member ceases active work, and the plan
member is no longer a member of an eligible class and premium payments stop.)
Question:
Which of the following statements correctly describes eligibility requirements under most group
insurance plans?
Answer:
Unmarried children under a specified age and dependent on the plan member for support are
eligible for coverage
Question:
Which of the following statements correctly describes the negotiated placement method of
marketing a group benefits plan?
Answer:
Once potential insurers are identified, each company submits a brief report that highlights its
general strategy, philosophy and proposed group benefits plan
Question:
True North Insurance has established a waiver-of-premium reserve of $100,000 and will have to
pay out an optional life insurance benefit of $200,000. With an interest rate of 6% compounded
annually, how many years will it take for the reserve of $100,000 to accumulate to $200,000?
Answer:
Answers Latest Graded A+
Question:
Which of the following statements correctly describes minimum requirements that group benefit
plans typically must meet in order to be prospectively rated on contract renewal?
Answer:
The more unpredictable the event that will trigger a claim, the larger the minimum group size and
premium requirements
Question:
Which of the following statements correctly describes the term graduation as it applies to mortality
tables?
Answer:
It is a mathematical process that removes anomalies that should not appear in the mortality data
Question:
If the plan sponsor pays the premium, which of the following group insured benefits is taxable to
the plan member?
Answer:
Long-term disability (LTD)
Question:
Which of the following statements correctly describes phases of a group plan marketing?
Answer:
Plan features of both contributory and noncontributory benefit plans must be communicated to plan
members during the enrollment process
Question:
Which of the following statements correctly describes a characteristic of an insurable risk?
Answer:
The loss must have financial significance to the insured (The loss must not be catastrophic to the
insurer. Option C: The loss must occur by chance. Option D: The loss must be predictable for the
,insurer.)
Question:
With respect to marketing a group insurance plan, which of the following statements best describes
insurer representatives known as account executives?
Answer:
They are involved in enrolling group members and installing new plans
Question:
Which of the following statements correctly describes the statistical concept known as the law of
large numbers?
Answer:
Future probabilities of loss are not valid unless a large number of incidents exist to ensure the
outcomes are less likely to deviate
Question:
Which of the following statements correctly describes an insured plan that is insurer- administered?
Answer:
For self-insured plans with an administrative services only (ASO) arrangement, the insurer bills the
plan sponsor monthly for administration fees
Question:
If the probability that an individual will live one year is 0.95 and the probability of dying in the
following year is 0.10, what is the probability that an individual will survive both years?
Answer:
0.855 (P (Survive both years) = (0.95) x (1 - 0.1) = 0.95 x 0.90 = 0.855.)
Question:
Which of the following statements correctly describes the group benefits enrollment process for
new employees?
Answer:
An employee can enroll in the plan any time between his or her date of hire and the end of a
waiting period
, Question:
A type of service offered under a third-party administrators (TPAs) claims settlement only
arrangement is:
Answer:
Adjudicating and paying claims
Question:
Unless otherwise specified in the group insurance contract, a plan member's status under a group
benefits plan terminates the earliest at which:
Answer:
The plan member retires (Unless otherwise specified in the group insurance contract, the order in
which coverage terminates is effective the earliest date the plan member retires, the plan member's
service with the plan sponsor is terminated, the plan member ceases active work, and the plan
member is no longer a member of an eligible class and premium payments stop.)
Question:
Which of the following statements correctly describes eligibility requirements under most group
insurance plans?
Answer:
Unmarried children under a specified age and dependent on the plan member for support are
eligible for coverage
Question:
Which of the following statements correctly describes the negotiated placement method of
marketing a group benefits plan?
Answer:
Once potential insurers are identified, each company submits a brief report that highlights its
general strategy, philosophy and proposed group benefits plan
Question:
True North Insurance has established a waiver-of-premium reserve of $100,000 and will have to
pay out an optional life insurance benefit of $200,000. With an interest rate of 6% compounded
annually, how many years will it take for the reserve of $100,000 to accumulate to $200,000?
Answer:
