Spouses Larry and Madge both work at the same pay grade for the federal government. Each of their group benefits packages includes family health and dental coverage, disability insurance with a $3,000 a month benefit, and $150,000 of life insurance with spouse as beneficiary. If Larry were to die while still employed, how will his group benefits be treated?

Group insurance benefits are contingent upon the member's active employment. Upon Larry's death, his employment with the federal government terminates. Consequently, his personal group benefits, such as health, dental, and disability insurance, also cease. Disability insurance is a personal coverage that provides income replacement to the insured in case of disability and is not transferable or payable upon death. The group life insurance is specifically designed to pay a death benefit to the designated beneficiary, which in this case is Madge. Therefore, she is entitled to claim the $150,000 death benefit, while the other coverages under Larry's plan terminate.

B. Disability insurance provides income replacement for the insured member; it is not a death benefit and cannot be rolled over to a beneficiary.
C. Neither health and dental coverage nor disability insurance can be "rolled over." These benefits are tied to the deceased's employment and terminate upon death.
D. The term "roll over" is incorrect for all benefits. Health/dental and disability coverages terminate, and the life insurance policy pays out a death benefit; it does not roll over.

1. IFSE Institute, Life Insurance (LLQP) Course, Group Life Insurance, Chapter 7, Section 7.4.1, "Termination of Coverage." This section outlines that group coverage for an employee terminates when their employment ends. Death is a form of employment termination, leading to the cessation of benefits like health, dental, and disability insurance.

2. IFSE Institute, Accident and Sickness Insurance (LLQP) Course, Group Accident and Sickness Insurance, Chapter 6, Section 6.3.2, "Disability Benefits." This chapter details that group disability benefits are payable to the insured member to replace lost income due to disability. The benefit is personal to the insured and coverage ceases upon their death.

3. Kaplan Financial Education, LLQP-Life Insurance, Module 7, "Group Life Insurance," Section "Termination Provisions." This module corroborates that an employee's group insurance coverage, including ancillary benefits like health and dental, ceases upon termination of employment. It also clarifies that the life insurance component becomes payable to the beneficiary upon the employee's death.