Question 1

The maximum amount that can be contributed to an IRA is:

Accepted Answer

A) 2% of your salary or $3,000, whichever is less 
B) $3,000 in 2004, and $5,000 after 2004 
C) $3,000, but that will increase to $5000 in 2008 
D) $3,000 in 2004, and then it increases $500 per year through 2010 
A) 2% of your salary or $3,000, whichever is less 
B) $3,000 in 2004, and $5,000 after 2004 
C) $3,000, but that will increase to $5000 in 2008 
D) $3,000 in 2004, and then it increases $500 per year through 2010

Question 2

Characteristics of group insurance include all the following except:

Accepted Answer

A) one master contract is issued to the employer; individual certificates of coverage are issued to employees 
B) the group is underwritten as a whole 
C) the group was not formed to purchase insurance on a group basis 
D) pre existing health impairments are always covered 
A) one master contract is issued to the employer; individual certificates of coverage are issued to employees 
B) the group is underwritten as a whole 
C) the group was not formed to purchase insurance on a group basis 
D) pre existing health impairments are always covered

Question 3

Which of the following statements about IRAs is false?

Accepted Answer

A) annual contributions made to the account are tax-deductible up to certain amounts 
B) they earn tax-deferred investment income 
C) only people in certain income categories can make deductible IRA contributions 
D) the maximum annual deductible contribution is $4,000 per person 
A) annual contributions made to the account are tax-deductible up to certain amounts 
B) they earn tax-deferred investment income 
C) only people in certain income categories can make deductible IRA contributions 
D) the maximum annual deductible contribution is $4,000 per person

Question 4

Why are employers interested in providing employee benefits to their employees?

Accepted Answer

Employers provide employee ben

Question 5

Explain the advantages to an employer of a defined benefit pension plan versus a defined contribution pension plan.

Accepted Answer

There are two advantages. 1. The defined

Question 6

One requirement of group insurance is that the group be formed for the purpose of purchasing coverage.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is not an employee benefit provided by private insurance?

Accepted Answer

A) group health insurance 
B) unemployment insurance 
C) pension plans 
D) group life insurance 
A) group health insurance 
B) unemployment insurance 
C) pension plans 
D) group life insurance

Question 8

What does ERISA stand for?

Accepted Answer

A) Employer retirement income security act 
B) Employee retirement income security act 
C) Employee restitution and income security act 
D) Employer required insurance standards amendment 
A) Employer retirement income security act 
B) Employee retirement income security act 
C) Employee restitution and income security act 
D) Employer required insurance standards amendment

Question 9

When you are "100% vested" in a pension plan,what does that mean?

Accepted Answer

A) You own 100% of your contributions, but you do not own the employer's contributions to the plan 
B) You own 100% of the employer's contributions, but you do not own your contributions to the plan 
C) You own 100% of your contributions to the plan 
D) You own 100% of the employer's contributions to the plan 
A) You own 100% of your contributions, but you do not own the employer's contributions to the plan 
B) You own 100% of the employer's contributions, but you do not own your contributions to the plan 
C) You own 100% of your contributions to the plan 
D) You own 100% of the employer's contributions to the plan

Question 10

An integrated disability income plan is one that:

Accepted Answer

A) limits the amount of coverage to 50 percent of pre disability take home wage 
B) coordinates the waiting period with other sick leave and personal leave plans 
C) requires a participation provision such as 20/80 when paying for eligible expenses 
D) coordinates the benefits under Social Security and the disability income plan 
A) limits the amount of coverage to 50 percent of pre disability take home wage 
B) coordinates the waiting period with other sick leave and personal leave plans 
C) requires a participation provision such as 20/80 when paying for eligible expenses 
D) coordinates the benefits under Social Security and the disability income plan

Question 11

An insured has incurred $12,000 in medical expenses from an illness.How much will he collect from a group major medical plan that has an 80/20 participation clause and a $500 deductible?

Accepted Answer

A) $500 
B) $ 8,000 
C) $ 9,200 
D) $11,500 
A) $500 
B) $ 8,000 
C) $ 9,200 
D) $11,500

Question 12

Jane is offered a pension plan through her employer. The plan agrees that if she will deposit 6% of her salary to a retirement account,the employer will deposit a matching amount. When Jane retires,whatever money is in the account will belong to her. What is the proper name for this type of pension plan?

Accepted Answer

A) A vested pension plan 
B) A defined contribution plan 
C) A defined benefit plan 
D) A tax deferred savings plan (401(k)) 
A) A vested pension plan 
B) A defined contribution plan 
C) A defined benefit plan 
D) A tax deferred savings plan (401(k))

Question 13

The primary purpose of a 401(k)plan is to:

Accepted Answer

A) save for retirement on a tax deferred basis 
B) save for retirement on a tax free basis 
C) save for retirement and have your employer match your contributions, all on a tax-free basis 
D) have a forced savings plan for emergencies 
A) save for retirement on a tax deferred basis 
B) save for retirement on a tax free basis 
C) save for retirement and have your employer match your contributions, all on a tax-free basis 
D) have a forced savings plan for emergencies

Question 14

From an employee's perspective,tax deferral is beneficial because

Accepted Answer

A) current taxes are increased in return for reduced taxes later 
B) money can be invested that would ordinarily be paid in current income taxes 
C) tax rates in the future are guaranteed to be lower 
D) since tax policy varies, there may be no tax on retirement income in the future 
A) current taxes are increased in return for reduced taxes later 
B) money can be invested that would ordinarily be paid in current income taxes 
C) tax rates in the future are guaranteed to be lower 
D) since tax policy varies, there may be no tax on retirement income in the future

Question 15

A cash balance pension plan guarantees the participating employee:

Accepted Answer

A) nothing 
B) a minimum interest rate on the employee's retirsement savings 
C) a minimum monthly pension amount for the first 10 years of retirement 
D) none of the above 
A) nothing 
B) a minimum interest rate on the employee's retirsement savings 
C) a minimum monthly pension amount for the first 10 years of retirement 
D) none of the above

Question 16

The monthly fee that HMOs charge employers is called the

Accepted Answer

A) capitation payment 
B) capitation and insurance premium 
C) insurance premium 
D) subscription fee 
A) capitation payment 
B) capitation and insurance premium 
C) insurance premium 
D) subscription fee

Question 17

Which of the following is not required for qualification of a group health or disability plan?

Accepted Answer

A) must cover all full time and part time employees from the first day of work 
B) must be in writing 
C) must create legally enforceable rights for the employees 
D) must be for the exclusive benefit of the employees 
A) must cover all full time and part time employees from the first day of work 
B) must be in writing 
C) must create legally enforceable rights for the employees 
D) must be for the exclusive benefit of the employees

Question 18

Generally,the justification from the employer's point of view in providing employee benefits is to attract,retain and motivate employees.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is not a characteristic of group insurance provided by an employer?

Accepted Answer

A) Many persons are covered under one contract 
B) Volume discount results in a lower cost for the coverage 
C) Evidence of insurability usually is not required 
D) Employers cannot require employees to share in the cost 
A) Many persons are covered under one contract 
B) Volume discount results in a lower cost for the coverage 
C) Evidence of insurability usually is not required 
D) Employers cannot require employees to share in the cost

Question 20

The face amount of group term life insurance is typically not selectable by the individual employee and therefore can be based on salary.

Accepted Answer

A) True 
 B)False

Exam 21: Employee Benefits

The maximum amount that can be contributed to an IRA is:

Characteristics of group insurance include all the following except:

Which of the following statements about IRAs is false?

Why are employers interested in providing employee benefits to their employees?

Explain the advantages to an employer of a defined benefit pension plan versus a defined contribution pension plan.

One requirement of group insurance is that the group be formed for the purpose of purchasing coverage.

Which of the following is not an employee benefit provided by private insurance?

What does ERISA stand for?

When you are "100% vested" in a pension plan,what does that mean?

An integrated disability income plan is one that:

An insured has incurred $12,000 in medical expenses from an illness.How much will he collect from a group major medical plan that has an 80/20 participation clause and a $500 deductible?

The primary purpose of a 401(k)plan is to:

From an employee's perspective,tax deferral is beneficial because

A cash balance pension plan guarantees the participating employee:

The monthly fee that HMOs charge employers is called the

Which of the following is not required for qualification of a group health or disability plan?

Generally,the justification from the employer's point of view in providing employee benefits is to attract,retain and motivate employees.

Which of the following is not a characteristic of group insurance provided by an employer?

The face amount of group term life insurance is typically not selectable by the individual employee and therefore can be based on salary.

Fundamentals and Terminology

Defining the Insurable Event

Risk Management

Financial Services Companies

Insurance Occupations

the Insurance Market: the Economic Problem

Insurance Regulation

Insurance Contracts

Basic Property and Liability Insurance Contracts

Homeowners Insurance

the Personal Auto Policy

Professional Financial Planning

Life Insurance Policies

Standard Life Insurance Contract Provisions And Options

Annuities

Medical Expense and Disability Insurance

Advanced Topics in Risk Management

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Bonding,Crime Insurance and Reinsurance

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