LLQP Group Benefits Plan Concepts 3

Question 1

What is 'experience rating' in the context of group insurance renewals?

Accepted Answer

Setting renewal premiums based on the group's actual claims history

Answer

Rating employees based on their work experience

Answer

Rating the insurer's experience in the market

Answer

A method of evaluating employee satisfaction with the plan

Question 2

What is the role of the 'plan sponsor' in a group benefits arrangement?

Accepted Answer

The employer or organization that establishes and maintains the group benefits plan

Answer

The insurance company that underwrites the plan

Answer

The government agency that regulates group benefits

Answer

The employee who enrolls in the plan

Question 3

What is a 'pooled benefit' in group insurance terminology?

Accepted Answer

A high-cost benefit where the risk is shared across many groups rather than rated on individual group experience

Answer

A benefit shared equally among all plan members

Answer

A benefit funded by a pool of investments

Answer

A benefit available only during a specific enrollment pool period

Question 4

What is the difference between a contributory and non-contributory group benefits plan?

Accepted Answer

Contributory plans require employee premium contributions; non-contributory plans are fully employer-paid

Answer

Contributory plans allow employee input on benefits; non-contributory plans do not

Answer

There is no meaningful difference between the two

Answer

Contributory plans are taxable; non-contributory plans are tax-free

Question 5

What is a 'dependent' under most Canadian group benefits plans?

Accepted Answer

A spouse or common-law partner and eligible children as defined by the plan

Answer

Any person living in the employee's household

Answer

Only legally married spouses

Answer

Any family member regardless of age or relationship

Question 6

What does the 'conversion privilege' in a group life insurance plan allow?

Accepted Answer

Converting group life coverage to an individual policy when leaving the group without evidence of insurability

Answer

Converting the group plan to a different insurer

Answer

Converting life insurance coverage to disability coverage

Answer

Converting premiums to investment contributions