CEBS Disability & Life Insurance Benefits Flashcards

What is a 'schedule of benefits' in a group life insurance plan?

Answer: A table defining benefit amounts based on salary class, position, or flat amounts

A schedule of benefits in group life insurance defines the death benefit amount for each employee class, often expressed as a multiple of salary (e.g., 1x, 2x annual salary) or as a flat dollar amount.

What is 'evidence of insurability' (EOI) in group life and disability plans?

Answer: Medical information an employee must provide to obtain coverage above guarantee issue limits

EOI (also called medical underwriting or a statement of health) is required when an employee elects coverage exceeding the guarantee issue limit, requests a late enrollment, or applies for increases above scheduled amounts.

Under Social Security, what is the definition of disability used to determine eligibility for Social Security Disability Insurance (SSDI) benefits?

Answer: Unable to engage in any substantial gainful activity (SGA) due to a medical condition expected to last at least 12 months or result in death

SSDI uses an 'any occupation' standard — claimants must be unable to perform substantial gainful activity due to a medically determinable impairment lasting or expected to last at least 12 months or to result in death.

What is the 'actively at work' requirement in group benefits plans?

Answer: Coverage typically becomes effective only if the employee is actively at work on the scheduled effective date

The actively at work provision conditions the effective date of coverage on the employee being present and performing their normal job duties on the day coverage would otherwise begin.

What is 'split-dollar life insurance' as it may be used in executive benefits planning?

Answer: An arrangement where the employer and employee share the premiums, cash value, and death benefit of a permanent life insurance policy

Split-dollar life insurance is an arrangement between an employer and employee to share the costs and benefits of a permanent life policy, often used as an executive retention and supplemental death benefit tool.

What distinguishes a 'non-contributory' group benefit plan from a 'contributory' one?

Answer: Non-contributory plans are funded entirely by the employer; contributory plans require employee premium sharing

In a non-contributory plan, the employer pays 100% of the premiums, while contributory plans require employees to share in the cost through payroll deductions.