CEBS - GBA 1 – EXAM QUESTIONS WITH COMPLETE
SOLUTIONS GUARANTEED PASS BRAND NEW 2025
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
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
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)
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
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.)
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
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
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
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.)
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
A type of service offered under a third-party administrators (TPAs)
claims settlement only arrangement is: - ANSWER - >Adjudicating and
paying claims
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.)
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
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
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).)
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
SOLUTIONS GUARANTEED PASS BRAND NEW 2025
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
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
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)
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
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.)
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
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
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
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.)
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
A type of service offered under a third-party administrators (TPAs)
claims settlement only arrangement is: - ANSWER - >Adjudicating and
paying claims
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.)
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
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
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).)
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
