Group Insurance and Gratuity Quiz

How often does the employer need to renew the group insurance contract?

• Monthly

• Quarterly

• Annually

• Every 2 years

• It varies depending on the scheme

Answer explanation

The employer needs to renew the group insurance contract annually, as it is done once a year.

In a group term insurance scheme, how does the sum assured vary based on the employee's grade or designation?

• Higher grade employees receive a higher sum assured

• Higher grade employees receive a lower sum assured

• The sum assured remains the same for all employees

• The sum assured is not determined by the employee's grade or designation

• None of the above

Answer explanation

In a group term insurance scheme, higher grade employees receive a higher sum assured, making the correct answer choice 'Higher grade employees receive a higher sum assured'.

In a contributory scheme, who pays a part of the premium?

• The employer

• The employees

• The insurance company

• Both the employer and employees

Answer explanation

In a contributory scheme, both the employer and employees pay a part of the premium, sharing the cost between them.

Who pays the premium in a group insurance scheme?

• The employer

• The employees

• The insurance company

• Both the employer and employees

• None of the above

Answer explanation

In a group insurance scheme, the premium is typically paid by the employer, making the correct choice 'The employer'.

What is the "pay-as-you-go" method of gratuity payment?

• Payment of gratuity when it falls due, using current revenues

• Payment of gratuity in advance, before it falls due

• Payment of gratuity in installments over a period of time

• Payment of gratuity based on the employee's performance

Answer explanation

Payment of gratuity when it falls due, using current revenues

Under what circumstances does an employer have to provide gratuity to employees?

• Death of the employee

• Disability of the employee

• Resignation of the employee (subject to certain conditions)

• Retirement of the employee

• All of the above

Answer explanation

All of the above options (Death, Disability, Resignation, Retirement) are circumstances under which an employer has to provide gratuity to employees.

Why is the "pay-as-you-go" method not considered prudent for gratuity payment?

• It depends on the amount of salary and number of years of service of an employee

• It may not be sufficient to cover a large amount of gratuity payments

• It does not provide financial stability to the employer

• It increases the administrative burden on the company

• All of the above

Answer explanation

It may not be sufficient to cover a large amount of gratuity payments. It does not provide financial stability to the employer. It increases the administrative burden on the company.

What factors are considered in premium pricing for group insurance?

• Size of the group

• Age distribution of the group

• Number of retired or departed employees

• Number of new employees

• All of the above

Answer explanation

All of the above factors are considered in premium pricing for group insurance, including the size of the group, age distribution, number of retired or departed employees, and number of new employees.

Which method of managing gratuity payments involves handing over the funds to an insurer?

• Creating an internal reserve

• Setting up a Gratuity Fund as an irrevocable trust

• Group Gratuity Scheme

• Pay-as-you-go method

Answer explanation

The Group Gratuity Scheme involves handing over the funds to an insurer for managing gratuity payments.

Who is eligible for group term insurance?

• Employer-employee relationships

• Professional associations (e.g., doctors, lawyers)

• Members of banks, trade unions, and weaker sections of society

• All of the above

Answer explanation

All of the above options are eligible for group term insurance, including employer-employee relationships, professional associations, and members of banks, trade unions, and weaker sections of society.