Finance quiz 4

What percentage of a company's employees must take a part in a noncontributory group life plan?

100%

Group life insurance is a single policy written to provide coverage to members of a group. Which of the following statements concerning group life is correct?

100% participation of members is required in noncontributory plans

What is the number of credits required for fully insured status for social security disability benefits?

40

In order to qualify fir conversion from a group life policy that has been terminated to an individual policy of the same coverage, a person must have been insured under the group plan for how many years?

5

An individual has been diagnosed with Alzheimer's disease. He is insured under a life insurance policy with the accelerated benefits rider. Which of the following is true regarding taxation of the accelerated benefits?

A portion of the benefit up to a limit is tax free; the rest is taxable Income

All of the following are examples of third party ownership of a life insurance policy except

An insured borrows money from the bank and makes a collateral assignment of a part of the death benefit to secure the loan

What does "liquidity" refer to in a life insurance policy?

Cash values can be borrowed at any time

Which of the following is true regarding taxation of dividends in participating policies?

Dividends are not taxable

Death benefits payable to a beneficiary under a life insurance policy are generally

Not subject to income taxation by the Federal Gov.

Which of the following statements concerning a simplified employee pension plan (SEP) is incorrect

SEPs are suitable for large companies (FALSE!!!)

Who may contribute to a Keogh (HR-10) plan?

Self-employed plumber

The advantage of qualified plans to employers is

Tax deductible contributions

An employee is insured under her employer's group life plan. If she terminates her group coverage, which of the following statements is incorrect?

The insured may choose to convert to term or permanent individual coverage

All of the following are general requirements of a qualified plan except

The plan must provide an offset for social security benefits

Which of the following best defines the "owner" as it pertains to life settlement contracts?

The policy owner of the life insurance policy

Under a SIMPLE plan, which of the following is TRUE regarding taxation on both contributions and earnings?

They are tax deferred until withdrawn

An insured under a life insurance policy has been diagnosed with a terminal illness and has 6 months to live. The insured knows that his financial state will worsen even more with the upcoming medical expenses. What option could the insured utilize?

Viatical settlement

An employee quits his job and converts his group policy to an individual policy; the premium for the individual policy will be based on his

attained age

All of the following are business uses of life insurance except

funding against company's general financial loss

If an insured surrenders his life insurance policy, which statements is true regarding the cash value of the policy?

it is only taxable if the cash value exceeds the amount paid for premiums

All of the following would be different between qualified and non qualified retirement plans except

taxation on accumulation

Which of the following is incorrect concerning a noncontributory group plan?

the employees receive individual policies