CEBS - GBA 1 - Practice Exam Latest 2023-2024/98
Questions And Answers Rated (A+)
Quiz :Which of the following statements correctly describes minimum
requirements that group benefit plans typically must meet in order to be
prospectively rated on contract renewal? - Answer :The more unpredictable
the event that will trigger a claim, the larger the minimum group size and
premium requirements
Quiz :Which of the following statements correctly describes the term
graduation as it applies to mortality tables? - Answer :It is a mathematical
process that removes anomalies that should not appear in the mortality data
Quiz :If the plan sponsor pays the premium, which of the following group
insured benefits is taxable to the plan member? - Answer :Long-term disability
(LTD)
Quiz :Which of the following statements correctly describes phases of a group
plan marketing? - Answer :Plan features of both contributory and
noncontributory benefit plans must be communicated to plan members during
the enrollment process
Quiz :Which of the following statements correctly describes a characteristic of
an insurable risk? - Answer :The loss must have financial significance to the
insured (The loss must not be catastrophic to the insurer. Option C: The loss
must occur by chance. Option D: The loss must be predictable for the insurer.)
Quiz :With respect to marketing a group insurance plan, which of the following
statements best describes insurer representatives known as account
executives? - Answer :They are involved in enrolling group members and
installing new plans
Quiz :Which of the following statements correctly describes the statistical
concept known as the law of large numbers? - Answer :Future probabilities of
loss are not valid unless a large number of incidents exist to ensure the
outcomes are less likely to deviate
Quiz :Which of the following statements correctly describes an insured plan
that is insurer-administered? - Answer :For self-insured plans with an
,administrative services only (ASO) arrangement, the insurer bills the plan
sponsor monthly for administration fees
Quiz :If the probability that an individual will live one year is 0.95 and the
probability of dying in the following year is 0.10, what is the probability that an
individual will survive both years? - Answer :0.855 (P (Survive both years) =
(0.95) x (1 - 0.1) = 0.95 x 0.90 = 0.855.)
Quiz :Which of the following statements correctly describes the group benefits
enrollment process for new employees? - Answer :An employee can enroll in
the plan any time between his or her date of hire and the end of a waiting
period
Quiz :A type of service offered under a third-party administrators (TPAs)
claims settlement only arrangement is: - Answer :Adjudicating and paying
claims
Quiz :Unless otherwise specified in the group insurance contract, a plan
member's status under a group benefits plan terminates the earliest at which: -
Answer :The plan member retires (Unless otherwise specified in the group
insurance contract, the order in which coverage terminates is effective the
earliest date the plan member retires, the plan member's service with the plan
sponsor is terminated, the plan member ceases active work, and the plan
member is no longer a member of an eligible class and premium payments
stop.)
Quiz :Which of the following statements correctly describes eligibility
requirements under most group insurance plans? - Answer :Unmarried
children under a specified age and dependent on the plan member for support
are eligible for coverage
Quiz :Which of the following statements correctly describes the negotiated
placement method of marketing a group benefits plan? - Answer :Once
potential insurers are identified, each company submits a brief report that
highlights its general strategy, philosophy and proposed group benefits plan
Quiz :True North Insurance has established a waiver-of-premium reserve of
$100,000 and will have to pay out an optional life insurance benefit of
$200,000. With an interest rate of 6% compounded annually, how many years
will it take for the reserve of $100,000 to accumulate to $200,000? -
, Answer :12 years (Use the relationship between future value and present value
to solve for the number of time periods.
FVt = PV x (1 + r)^t
$200,000 = $100,000 x (1 + 6%)^t
$200,000/$100,000 = (1.06)^t
2.00 = (1.06)^t
The number of time periods can be approximated using the future value table.
With an interest rate of 6%, it will take 12 years to accumulate to a sum of
$200,000 (or 2.01220).)
Quiz :Which of the following statements correctly describes a group insurance
policy? - Answer :It is issued on a group of individuals for protection against
financial hazards, such as death, accident and sickness
Quiz :Last year, a small town reported that 20 people under the age of 50
died. If the population of people under the age of 50 in the town is 10,000,
what is the probability of a resident under the age of 50 dying? - Answer :0.2%
(Probability of a resident under the age of 50 dying is 20/10,000 = 0.002 =
0.2%.)
Quiz :Which of the following statements correctly describes the predictability
of an event and the cost of insurance under a group benefits plan? -
Answer :An out-of-country emergency is an unforeseen event with a
potentially high cost (Disability is an unforeseen event with a potentially high
cost. Option C: Basic dental services are a predictable event with a low cost.
Option D: Paramedical services are an unforeseen event with a low cost.)
Quiz :Which of the following statements best describes individual large
amount pooling? - Answer :It protects the plan sponsor from claims payments
with respect to any one insured individual in excess of the pooling limit or pool
ceiling.
Quiz :Nevaeh works full¬time as a business manager on her family's dairy
farm. She has an allergy to grain that is triggered by direct contact. If she
becomes sick and is unable to work, she loses her only source of income and
her lifestyle will change significantly. Which of the following risk management
approaches would BEST address Nevaeh's need to protect her income? -
Answer :Transfer the risk of becoming sick (Assuming Nevaeh wants to stay in
farming, avoidance is not an option. Nevaeh can do everything she can to take
Questions And Answers Rated (A+)
Quiz :Which of the following statements correctly describes minimum
requirements that group benefit plans typically must meet in order to be
prospectively rated on contract renewal? - Answer :The more unpredictable
the event that will trigger a claim, the larger the minimum group size and
premium requirements
Quiz :Which of the following statements correctly describes the term
graduation as it applies to mortality tables? - Answer :It is a mathematical
process that removes anomalies that should not appear in the mortality data
Quiz :If the plan sponsor pays the premium, which of the following group
insured benefits is taxable to the plan member? - Answer :Long-term disability
(LTD)
Quiz :Which of the following statements correctly describes phases of a group
plan marketing? - Answer :Plan features of both contributory and
noncontributory benefit plans must be communicated to plan members during
the enrollment process
Quiz :Which of the following statements correctly describes a characteristic of
an insurable risk? - Answer :The loss must have financial significance to the
insured (The loss must not be catastrophic to the insurer. Option C: The loss
must occur by chance. Option D: The loss must be predictable for the insurer.)
Quiz :With respect to marketing a group insurance plan, which of the following
statements best describes insurer representatives known as account
executives? - Answer :They are involved in enrolling group members and
installing new plans
Quiz :Which of the following statements correctly describes the statistical
concept known as the law of large numbers? - Answer :Future probabilities of
loss are not valid unless a large number of incidents exist to ensure the
outcomes are less likely to deviate
Quiz :Which of the following statements correctly describes an insured plan
that is insurer-administered? - Answer :For self-insured plans with an
,administrative services only (ASO) arrangement, the insurer bills the plan
sponsor monthly for administration fees
Quiz :If the probability that an individual will live one year is 0.95 and the
probability of dying in the following year is 0.10, what is the probability that an
individual will survive both years? - Answer :0.855 (P (Survive both years) =
(0.95) x (1 - 0.1) = 0.95 x 0.90 = 0.855.)
Quiz :Which of the following statements correctly describes the group benefits
enrollment process for new employees? - Answer :An employee can enroll in
the plan any time between his or her date of hire and the end of a waiting
period
Quiz :A type of service offered under a third-party administrators (TPAs)
claims settlement only arrangement is: - Answer :Adjudicating and paying
claims
Quiz :Unless otherwise specified in the group insurance contract, a plan
member's status under a group benefits plan terminates the earliest at which: -
Answer :The plan member retires (Unless otherwise specified in the group
insurance contract, the order in which coverage terminates is effective the
earliest date the plan member retires, the plan member's service with the plan
sponsor is terminated, the plan member ceases active work, and the plan
member is no longer a member of an eligible class and premium payments
stop.)
Quiz :Which of the following statements correctly describes eligibility
requirements under most group insurance plans? - Answer :Unmarried
children under a specified age and dependent on the plan member for support
are eligible for coverage
Quiz :Which of the following statements correctly describes the negotiated
placement method of marketing a group benefits plan? - Answer :Once
potential insurers are identified, each company submits a brief report that
highlights its general strategy, philosophy and proposed group benefits plan
Quiz :True North Insurance has established a waiver-of-premium reserve of
$100,000 and will have to pay out an optional life insurance benefit of
$200,000. With an interest rate of 6% compounded annually, how many years
will it take for the reserve of $100,000 to accumulate to $200,000? -
, Answer :12 years (Use the relationship between future value and present value
to solve for the number of time periods.
FVt = PV x (1 + r)^t
$200,000 = $100,000 x (1 + 6%)^t
$200,000/$100,000 = (1.06)^t
2.00 = (1.06)^t
The number of time periods can be approximated using the future value table.
With an interest rate of 6%, it will take 12 years to accumulate to a sum of
$200,000 (or 2.01220).)
Quiz :Which of the following statements correctly describes a group insurance
policy? - Answer :It is issued on a group of individuals for protection against
financial hazards, such as death, accident and sickness
Quiz :Last year, a small town reported that 20 people under the age of 50
died. If the population of people under the age of 50 in the town is 10,000,
what is the probability of a resident under the age of 50 dying? - Answer :0.2%
(Probability of a resident under the age of 50 dying is 20/10,000 = 0.002 =
0.2%.)
Quiz :Which of the following statements correctly describes the predictability
of an event and the cost of insurance under a group benefits plan? -
Answer :An out-of-country emergency is an unforeseen event with a
potentially high cost (Disability is an unforeseen event with a potentially high
cost. Option C: Basic dental services are a predictable event with a low cost.
Option D: Paramedical services are an unforeseen event with a low cost.)
Quiz :Which of the following statements best describes individual large
amount pooling? - Answer :It protects the plan sponsor from claims payments
with respect to any one insured individual in excess of the pooling limit or pool
ceiling.
Quiz :Nevaeh works full¬time as a business manager on her family's dairy
farm. She has an allergy to grain that is triggered by direct contact. If she
becomes sick and is unable to work, she loses her only source of income and
her lifestyle will change significantly. Which of the following risk management
approaches would BEST address Nevaeh's need to protect her income? -
Answer :Transfer the risk of becoming sick (Assuming Nevaeh wants to stay in
farming, avoidance is not an option. Nevaeh can do everything she can to take
