CompuCram Health and Life Insurance
Pre-Assessment
What element of a policy is NOT guaranteed in a whole life policy? - ✔️✔️Dividends -
Dividends can never be guaranteed.
Sally quits her old job and refuses to convert her group life policy, for which she was
paying $50 a month. Her death benefit was double her salary, or $80,000. She is killed
in a fire 20 days after quitting the old company. What benefit will her beneficiary
receive? - ✔️✔️$79,950 - Sally died during the grace period, so one more premium will
be deducted and her beneficiary gets the remainder. Even though she did not elect
coverage, the old policy still pays.
A policy where the death benefit does not decrease and the premium stays the same for
a set period of time is best known as - ✔️✔️Level Term - Level term plans have a set
face amount and a set premium amount for the duration of the policy, but at some point
the coverage will end.
When an eligible employee does not enroll in the employer's group life insurance
program during the eligibility period, he or she must - ✔️✔️Wait until the next open
enrollment period for which he or she is eligible. - For larger groups, the employer must
offer an open enrollment period once each year, usually in the group's anniversary
month. For small group life cases (2-50 employees), the rules are much different. An
employee who does not enroll in a timely manner may be excluded for a full 18 months.
The employee would be eligible to enter during the next open enrollment period
following the 18-month exclusion.
Group Life plan sponsors include all of the following, EXCEPT - ✔️✔️Civil unions - A
Civil Union is a legal relationship between two people, it is not a group plan sponsor as
the other three choices are.
Ellen has just resigned from her company to set up her own consulting enterprise. How
long does she have to decide whether to convert her group life insurance policy? -
✔️✔️31 days - The standard grace period for group insurance conversion is 31 days.
The investments supporting a universal life insurance policy are kept in - ✔️✔️The
company's general account - Investments that support whole and universal life policies
are held in the company's general account; variable policies assets are held in a
separate account.
Fixed, level premiums are characteristics of - ✔️✔️Whole life - Whole life is a
permanent form of life insurance. Because this product has a guaranteed death benefit,
, it requires a fixed, level premium determined by the company, which will support the
guaranteed death benefit.
When a firm established a contributory group life insurance policy, what percentage test
of eligible employees must be satisfied for participation? - ✔️✔️75% - The 75%
requirement protects the insurance company from adverse selection by the employees
of the firm.
What statement is correct with regard to the waiver of premium benefit? - ✔️✔️This
benefit may be added to a life insurance contract for an additional premium. - Waiver of
premium is optional, costs additional premium, and will pay benefits generally after six
months of continuous disability.
The payor benefit typically waives premiums on a juvenile policy if the - ✔️✔️Person
who pays the premium dies or becomes disabled before the insured child reaches a
certain age. - This provision will keep juvenile policies in force even if the policy owner
becomes disabled or dies.
The non-forfeiture option that will provide the largest face amount of coverage for the
insured is the - ✔️✔️Extended term option -In life insurance policies that have cash
value, extended term is a non-forfeiture option that allows the policy owner to continue
the policy in the form of term insurance in the same face amount as the policy being
surrendered. The length of the extended term is stated in the non-forfeiture table and is
directly related to the amount of cash value accumulated in the policy and available
after the surrender or lapse of the policy.
If Greg's policy on his own life has a guaranteed insurability rider, it means that he can
purchase more insurance - ✔️✔️On his own life at certain specified ages, regardless of
his insurability at that time. - The value of this rider is that it guarantees Greg's future
insurability. At certain ages and following certain special occasions with some
companies, Greg will be able to buy more life insurance without having to prove he is
insurable.
When Bill and Bernice were both involved in a terrible auto crash, Bill died right away.
Bernice was severely injured and was rushed to the hospital. Bernice was listed as the
primary beneficiary on Bill's life insurance policy, and a trust for their twin sons was
listed as the contingent beneficiary. When Bernice died 6 weeks later without ever
regaining consciousness, a check for Bill's life insurance proceeds and interest was sent
to the trust. What provision must have been in force? - ✔️✔️Common disaster clause -
Usually, the insurer pays out to the first beneficiary right away. In this case, there must
have been a common disaster clause that stated the primary beneficiary had to survive
Bill by a stated time, such as 90 days, before the payout would be sent. When Bernice
died without having met the time requirement of the common disaster clause the
insurance company paid the policy's death benefit to the contingent beneficiary, the
trust for the sons.
Pre-Assessment
What element of a policy is NOT guaranteed in a whole life policy? - ✔️✔️Dividends -
Dividends can never be guaranteed.
Sally quits her old job and refuses to convert her group life policy, for which she was
paying $50 a month. Her death benefit was double her salary, or $80,000. She is killed
in a fire 20 days after quitting the old company. What benefit will her beneficiary
receive? - ✔️✔️$79,950 - Sally died during the grace period, so one more premium will
be deducted and her beneficiary gets the remainder. Even though she did not elect
coverage, the old policy still pays.
A policy where the death benefit does not decrease and the premium stays the same for
a set period of time is best known as - ✔️✔️Level Term - Level term plans have a set
face amount and a set premium amount for the duration of the policy, but at some point
the coverage will end.
When an eligible employee does not enroll in the employer's group life insurance
program during the eligibility period, he or she must - ✔️✔️Wait until the next open
enrollment period for which he or she is eligible. - For larger groups, the employer must
offer an open enrollment period once each year, usually in the group's anniversary
month. For small group life cases (2-50 employees), the rules are much different. An
employee who does not enroll in a timely manner may be excluded for a full 18 months.
The employee would be eligible to enter during the next open enrollment period
following the 18-month exclusion.
Group Life plan sponsors include all of the following, EXCEPT - ✔️✔️Civil unions - A
Civil Union is a legal relationship between two people, it is not a group plan sponsor as
the other three choices are.
Ellen has just resigned from her company to set up her own consulting enterprise. How
long does she have to decide whether to convert her group life insurance policy? -
✔️✔️31 days - The standard grace period for group insurance conversion is 31 days.
The investments supporting a universal life insurance policy are kept in - ✔️✔️The
company's general account - Investments that support whole and universal life policies
are held in the company's general account; variable policies assets are held in a
separate account.
Fixed, level premiums are characteristics of - ✔️✔️Whole life - Whole life is a
permanent form of life insurance. Because this product has a guaranteed death benefit,
, it requires a fixed, level premium determined by the company, which will support the
guaranteed death benefit.
When a firm established a contributory group life insurance policy, what percentage test
of eligible employees must be satisfied for participation? - ✔️✔️75% - The 75%
requirement protects the insurance company from adverse selection by the employees
of the firm.
What statement is correct with regard to the waiver of premium benefit? - ✔️✔️This
benefit may be added to a life insurance contract for an additional premium. - Waiver of
premium is optional, costs additional premium, and will pay benefits generally after six
months of continuous disability.
The payor benefit typically waives premiums on a juvenile policy if the - ✔️✔️Person
who pays the premium dies or becomes disabled before the insured child reaches a
certain age. - This provision will keep juvenile policies in force even if the policy owner
becomes disabled or dies.
The non-forfeiture option that will provide the largest face amount of coverage for the
insured is the - ✔️✔️Extended term option -In life insurance policies that have cash
value, extended term is a non-forfeiture option that allows the policy owner to continue
the policy in the form of term insurance in the same face amount as the policy being
surrendered. The length of the extended term is stated in the non-forfeiture table and is
directly related to the amount of cash value accumulated in the policy and available
after the surrender or lapse of the policy.
If Greg's policy on his own life has a guaranteed insurability rider, it means that he can
purchase more insurance - ✔️✔️On his own life at certain specified ages, regardless of
his insurability at that time. - The value of this rider is that it guarantees Greg's future
insurability. At certain ages and following certain special occasions with some
companies, Greg will be able to buy more life insurance without having to prove he is
insurable.
When Bill and Bernice were both involved in a terrible auto crash, Bill died right away.
Bernice was severely injured and was rushed to the hospital. Bernice was listed as the
primary beneficiary on Bill's life insurance policy, and a trust for their twin sons was
listed as the contingent beneficiary. When Bernice died 6 weeks later without ever
regaining consciousness, a check for Bill's life insurance proceeds and interest was sent
to the trust. What provision must have been in force? - ✔️✔️Common disaster clause -
Usually, the insurer pays out to the first beneficiary right away. In this case, there must
have been a common disaster clause that stated the primary beneficiary had to survive
Bill by a stated time, such as 90 days, before the payout would be sent. When Bernice
died without having met the time requirement of the common disaster clause the
insurance company paid the policy's death benefit to the contingent beneficiary, the
trust for the sons.
