CEBS GBA 1 ACTUAL 2026 CORE EXAM TEST QUESTIONS
AND ANSWERS GRADED A+
✔✔Which of the following statements correctly describes the predictability of an event
and the cost of insurance under a group benefits plan? - ✔✔An out-of-country
emergency is an unforeseen event with a potentially high cost (Disability is an
unforeseen event with a potentially high cost. Option C: Basic dental services are a
predictable event with a low cost. Option D: Paramedical services are an unforeseen
event with a low cost.)
✔✔Which of the following statements best describes individual large amount pooling? -
✔✔It protects the plan sponsor from claims payments with respect to any one insured
individual in excess of the pooling limit or pool ceiling.
✔✔Nevaeh works full¬time as a business manager on her family's dairy farm. She has
an allergy to grain that is triggered by direct contact. If she becomes sick and is unable
to work, she loses her only source of income and her lifestyle will change significantly.
Which of the following risk management approaches would BEST address Nevaeh's
need to protect her income? - ✔✔Transfer the risk of becoming sick (Assuming Nevaeh
wants to stay in farming, avoidance is not an option. Nevaeh can do everything she can
to take measures to reduce her exposure, but if becoming sick jeopardizes her only
source of income, Option C, purchasing insurance, is the best option.)
✔✔Under the coordination-¬of-¬benefits (COB) provision, which of the following plans
is the first payer in respect of a claim for a covered dependent child under a single-
custody arrangement? - ✔✔Plan of the parent with custody of the child
✔✔In terms of designing a group benefits plan, which of the following statements
correctly describes a benefit/needs-oriented philosophy? - ✔✔An example of a needs-
oriented benefit is health care
✔✔Which of the following statements correctly describes static tables and tables with
projection? - ✔✔In "mortality tables with projection," it is assumed that the mortality rate
at a particular age will improve in the future by a certain percentage per year (Static
tables include mortality rates that are not adjusted for expected future mortality
improvements. Option B: Instead of replacing tables, actuaries typically make
adjustments for unexpected improvements in mortality. Option C: Setbacks method
uses the same mortality rate but assumes that it applies to a lower age.)
✔✔Which of the following statements correctly describes participation ratios in a
benefits plan? - ✔✔A noncontributory life insurance plan with liberal eligibility
requirements should have a reasonably high participation ratio (The level of benefits
under a mandatory, noncontributory life insurance plan does not affect participation
ratios. Option C: An optional life insurance plan should have a lower participation ratio if
, eligibility requirements are tight. Option D: The level of plan member contributions under
a voluntary, contributory plan has an impact on participation ratios.)
✔✔Vivienne's health care plan pays a maximum of $5,000 if she is hospitalized. She
was recently hospitalized and her actual expenses were $4,000. Vivienne's insurer will
pay the actual amount of expenses and not the $5,000 maximum stipulated in the plan.
This is an example of: - ✔✔A contract of indemnity (A valued contract specifies in
advance the amount payable when a loss occurs regardless of the actual loss amount.
Option B: Face value is the amount of insurance payable under the policy. Option D:
Liability risk is the risk of economic loss resulting from an individual being held
accountable for harming others or their property.)
✔✔Which of the following statements correctly describes processing health care claims
under a group benefits plan? - ✔✔The plan member must submit a completed claim
form and written proof of the expense within a specified time period to recover eligible
expenses
✔✔Which of the following statements correctly describes marketing a group benefits
plan? - ✔✔If a plan sponsor decides to cancel a plan, it typically must notify the insurer
within 30 to 60 days before the effective date of cancellation
✔✔How is the funding arrangement for a nonunionized single-employer plan
determined? - ✔✔By the amount the employer is willing and/or able to contribute from
revenue
✔✔Which of the following statements correctly describes an income replacement
benefit provided under a group benefits plan? - ✔✔Sick leave plans typically provide full
pay for absences from work due to sickness or injury for a short period (A long-term
disability (LTD) plan is the most common method of providing extended income
replacement benefits to plan members who are disabled and unable to work due to
prolonged illness or injury. Option C: Salary continuance plans typically provide benefits
for the full period of short-term disability up to the end of the elimination period under an
LTD plan. Option D: An LTD plan typically replaces 55¬-75% of a disabled plan
member's gross earnings, subject to a maximum monthly amount.)
✔✔Which of the following statements correctly describes the financial accounting of a
self-insured group benefits plan using a billed-in-advance administrative services only
(ASO) arrangement with an insurer? - ✔✔Year-end plan surpluses may be carried
forward as a positive cash balance to the next contract period for payment of claims
✔✔Eagle Assurance is expecting to pay total death benefits of $150,000 at the end of
four years. Assuming the interest rate is 6% per year compounded semiannually, what
reserve level must be held today to meet this future obligation? - ✔✔$118,412: Use the
present value formula or present value table to determine the reserve level.
AND ANSWERS GRADED A+
✔✔Which of the following statements correctly describes the predictability of an event
and the cost of insurance under a group benefits plan? - ✔✔An out-of-country
emergency is an unforeseen event with a potentially high cost (Disability is an
unforeseen event with a potentially high cost. Option C: Basic dental services are a
predictable event with a low cost. Option D: Paramedical services are an unforeseen
event with a low cost.)
✔✔Which of the following statements best describes individual large amount pooling? -
✔✔It protects the plan sponsor from claims payments with respect to any one insured
individual in excess of the pooling limit or pool ceiling.
✔✔Nevaeh works full¬time as a business manager on her family's dairy farm. She has
an allergy to grain that is triggered by direct contact. If she becomes sick and is unable
to work, she loses her only source of income and her lifestyle will change significantly.
Which of the following risk management approaches would BEST address Nevaeh's
need to protect her income? - ✔✔Transfer the risk of becoming sick (Assuming Nevaeh
wants to stay in farming, avoidance is not an option. Nevaeh can do everything she can
to take measures to reduce her exposure, but if becoming sick jeopardizes her only
source of income, Option C, purchasing insurance, is the best option.)
✔✔Under the coordination-¬of-¬benefits (COB) provision, which of the following plans
is the first payer in respect of a claim for a covered dependent child under a single-
custody arrangement? - ✔✔Plan of the parent with custody of the child
✔✔In terms of designing a group benefits plan, which of the following statements
correctly describes a benefit/needs-oriented philosophy? - ✔✔An example of a needs-
oriented benefit is health care
✔✔Which of the following statements correctly describes static tables and tables with
projection? - ✔✔In "mortality tables with projection," it is assumed that the mortality rate
at a particular age will improve in the future by a certain percentage per year (Static
tables include mortality rates that are not adjusted for expected future mortality
improvements. Option B: Instead of replacing tables, actuaries typically make
adjustments for unexpected improvements in mortality. Option C: Setbacks method
uses the same mortality rate but assumes that it applies to a lower age.)
✔✔Which of the following statements correctly describes participation ratios in a
benefits plan? - ✔✔A noncontributory life insurance plan with liberal eligibility
requirements should have a reasonably high participation ratio (The level of benefits
under a mandatory, noncontributory life insurance plan does not affect participation
ratios. Option C: An optional life insurance plan should have a lower participation ratio if
, eligibility requirements are tight. Option D: The level of plan member contributions under
a voluntary, contributory plan has an impact on participation ratios.)
✔✔Vivienne's health care plan pays a maximum of $5,000 if she is hospitalized. She
was recently hospitalized and her actual expenses were $4,000. Vivienne's insurer will
pay the actual amount of expenses and not the $5,000 maximum stipulated in the plan.
This is an example of: - ✔✔A contract of indemnity (A valued contract specifies in
advance the amount payable when a loss occurs regardless of the actual loss amount.
Option B: Face value is the amount of insurance payable under the policy. Option D:
Liability risk is the risk of economic loss resulting from an individual being held
accountable for harming others or their property.)
✔✔Which of the following statements correctly describes processing health care claims
under a group benefits plan? - ✔✔The plan member must submit a completed claim
form and written proof of the expense within a specified time period to recover eligible
expenses
✔✔Which of the following statements correctly describes marketing a group benefits
plan? - ✔✔If a plan sponsor decides to cancel a plan, it typically must notify the insurer
within 30 to 60 days before the effective date of cancellation
✔✔How is the funding arrangement for a nonunionized single-employer plan
determined? - ✔✔By the amount the employer is willing and/or able to contribute from
revenue
✔✔Which of the following statements correctly describes an income replacement
benefit provided under a group benefits plan? - ✔✔Sick leave plans typically provide full
pay for absences from work due to sickness or injury for a short period (A long-term
disability (LTD) plan is the most common method of providing extended income
replacement benefits to plan members who are disabled and unable to work due to
prolonged illness or injury. Option C: Salary continuance plans typically provide benefits
for the full period of short-term disability up to the end of the elimination period under an
LTD plan. Option D: An LTD plan typically replaces 55¬-75% of a disabled plan
member's gross earnings, subject to a maximum monthly amount.)
✔✔Which of the following statements correctly describes the financial accounting of a
self-insured group benefits plan using a billed-in-advance administrative services only
(ASO) arrangement with an insurer? - ✔✔Year-end plan surpluses may be carried
forward as a positive cash balance to the next contract period for payment of claims
✔✔Eagle Assurance is expecting to pay total death benefits of $150,000 at the end of
four years. Assuming the interest rate is 6% per year compounded semiannually, what
reserve level must be held today to meet this future obligation? - ✔✔$118,412: Use the
present value formula or present value table to determine the reserve level.
