LLQP - Life License Qualification Program Group Benefits Plan Concepts Questions and Answers

Question 1

A mid-sized company offers a group benefits plan where it pays the entire premium for all eligible employees.
The insurer mandates that 100% of eligible employees must be enrolled.
What is this type of plan called?

Accepted Answer

A non-contributory plan

Answer

A cafeteria plan

Answer

A contributory plan

Answer

An administrative services only (ASO) plan

Question 2

An employee is covered under a group long-term disability (LTD) plan where the employer pays 100% of the premiums. If the employee becomes disabled and starts receiving monthly benefits, what is the tax treatment of these benefits?

Accepted Answer

The benefits are considered taxable income to the employee.

Answer

The benefits are received completely tax-free.

Answer

Only 50% of the benefits are taxable.

Answer

The benefits are taxable only if the employee also receives CPP disability benefits.

Question 3

Mei and her husband, Liam, are both covered under their respective employers' group health plans, and they have also covered their dependent child on both plans. Mei's birthday is March 15th, and Liam's is August 2nd. If their child requires a medical service, how will the claim be paid under standard coordination of benefits (COB) rules?

Accepted Answer

Mei's plan pays first because her birthday occurs earlier in the calendar year.

Answer

Liam's plan pays first because he is the father.

Answer

They can choose which plan to submit the claim to first.

Answer

Both plans will pay 50% of the eligible expense.

Question 4

An employee who is covered by $200,000 of group life insurance resigns from their job. Which of the following statements best describes the 'conversion privilege' available to this employee?

Accepted Answer

The employee is entitled to receive the cash surrender value of their group coverage.

Answer

The employee can continue the group coverage for up to 18 months by paying the premiums.

Answer

The employee can convert the group coverage to an individual term policy but must provide medical evidence of insurability.

Answer

The employee has the right to convert to an individual permanent life insurance policy, within a specified time limit and without providing evidence of insurability.

Question 5

A large corporation decides to self-fund its employees' health and dental claims but hires an insurance company to handle claims processing and administration. The corporation assumes the financial risk for the claims paid. What is this type of arrangement called?

Accepted Answer

An Administrative Services Only (ASO) plan

Answer

A fully insured plan

Answer

A Health Care Spending Account (HCSA)

Answer

A non-contributory plan

Question 6

What is the primary purpose of a probationary period in a group benefits plan?

Accepted Answer

To serve as a waiting period before a new employee becomes eligible for benefits, ensuring they are a continuing employee.

Answer

To allow the insurer to medically underwrite each new employee.

Answer

To provide a discount on premiums for the first few months of employment.

Answer

To require employees to pass a skills test before they can enroll in the benefits plan.