CEBS - GBA 1 - Practice Exam with Accurate Questions
and Answers (Verified Answers) | Latest (2026/2027)
Updated Version {JUST RELEASED}
1. 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
2. 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
3. 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)
4. 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
5. 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.)
6. 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
7. 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
8. 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
9. 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.)
,10. 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
11. A type of service offered under a third-party administrators (TPAs) claims
settlement only arrangement is: - ANSWER ✓ Adjudicating and paying claims
12. 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.)
13. 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
14. 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
15. 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 ✓ 12 years (Use
the relationship between future value and present value to solve for the number
of time periods.
FVt = PV x (1 + r)^t
$200,000 = $100,000 x (1 + 6%)^t
$200,000/$100,000 = (1.06)^t
2.00 = (1.06)^t
The number of time periods can be approximated using the future value table.
With an interest rate of 6%, it will take 12 years to accumulate to a sum of
$200,000 (or 2.01220).)
16. Which of the following statements correctly describes a group insurance
policy? - ANSWER ✓ It is issued on a group of individuals for protection
against financial hazards, such as death, accident and sickness
and Answers (Verified Answers) | Latest (2026/2027)
Updated Version {JUST RELEASED}
1. 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
2. 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
3. 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)
4. 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
5. 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.)
6. 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
7. 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
8. 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
9. 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.)
,10. 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
11. A type of service offered under a third-party administrators (TPAs) claims
settlement only arrangement is: - ANSWER ✓ Adjudicating and paying claims
12. 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.)
13. 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
14. 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
15. 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 ✓ 12 years (Use
the relationship between future value and present value to solve for the number
of time periods.
FVt = PV x (1 + r)^t
$200,000 = $100,000 x (1 + 6%)^t
$200,000/$100,000 = (1.06)^t
2.00 = (1.06)^t
The number of time periods can be approximated using the future value table.
With an interest rate of 6%, it will take 12 years to accumulate to a sum of
$200,000 (or 2.01220).)
16. Which of the following statements correctly describes a group insurance
policy? - ANSWER ✓ It is issued on a group of individuals for protection
against financial hazards, such as death, accident and sickness
