Life Insurance chapter 7

which of the following scenarios will incur a 10% tax penalty on distributions?

Distributions are made on a policy before age 59 1/2

If a retirement plan or annuity is "qualified," this means

It is approved by the IRS

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

Self-employed plumber

Which of the following applicants would NOT qualify for a Keogh Plan?

Someone who works 400 hours per year

All of the following statements are true regarding tax-qualified annuities EXCEPT

Employer contributions are not tax deductible

All of the following would be different qualified and nonqualified retirement plans EXCEPT

Taxation on accumulation

A 403(b) plan, commonly referred to as a TSA, is available to be used by

Teachers and not-for-profit organizations

All of the following employees may use a 403(b) plan for their retirement EXCEPT

The CEO of a private corporation

SIMPLE Plans require all of the following EXCEPT

At least 1,000 employees

A tax-shelter annuity is a special tax-favored retirement plan available to

Certain groups of employees only

Which of the following is TRUE of a qualified plan?

It has a tax benefit for both employer and employee

Which of the following is an IRS qualified retirement program for the self-employed?

Keogh

Which of the following statements concerning a Simplified Employee Pension plan (SEP) is INCORRECT?

SEPs are suitable for large companies

An IRA purchased by a small employer to cover employees is known as a

Simplified Employee Pension plan

Which of the following describes the tax advantage of a qualified retirement plan?

The earnings in the plan accumulate tax deferred

How are contributions to a tax-sheltered annuity treated with regards to taxation?

They are not included as income for the employee, but are taxable upon distribution

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

The plan must provide an offset for social security benefits

Employer contributions made to a qualified plan

Are subject to vesting requirements

All of the following would be eligible to establish a Keogh retirement plan EXCEPT

The president and employee of a family corporation

Two attorneys operate their practice as a partnership. They want to start a program through their practice that will provide retirement benefits for themselves and three employees. They would likely choose

HR-10 (Keogh Plan)