CLU Group Benefits and Employee Insurance 2

Question 1

What is a key advantage of a noncontributory group life insurance plan from the employer's perspective?

Accepted Answer

100% participation is automatic, eliminating adverse selection

Answer

Noncontributory plans, where the employer pays 100% of the premium, require 100% employee participation, which completely eliminates adverse selection.

Question 2

Which federal law requires employers with 20 or more employees to offer continuation of group health coverage to qualifying beneficiaries who lose coverage?

Accepted Answer

COBRA

Answer

The Consolidated Omnibus Budget Reconciliation Act (COBRA) mandates that employers with 20+ employees offer continued group health coverage for up to 18–36 months after qualifying events.

Question 3

In a group insurance context, what is a 'benefit trigger' in a long-term care insurance policy?

Accepted Answer

A condition that must be met before benefits are payable

Answer

A benefit trigger is a qualifying condition — such as inability to perform a specified number of ADLs or cognitive impairment — that must occur before LTC benefits become payable.

Question 4

How does dependent life insurance under a group plan typically differ from the employee's own coverage?

Accepted Answer

Dependent coverage amounts are usually smaller flat amounts

Answer

Dependent life insurance under group plans typically provides small flat-dollar amounts (e.g., $2,000–$10,000) rather than multiples of salary, as for the employee.

Question 5

What is the 'evidence of insurability' requirement most commonly waived in group life insurance during?

Accepted Answer

Initial eligibility period when first becoming eligible

Answer

Evidence of insurability is most commonly waived during the initial eligibility period — typically the first 30 to 31 days after becoming eligible — encouraging enrollment without medical underwriting.

CLU - Chartered Life Underwriter Practice Test

CLU - Chartered Life Underwriter Practice Test

CLU Group Benefits and Employee Insurance 2