Quiz 4

Which of the following terms mean a result of calculation based on the average number of months the insured is projected to live due to medical history/mortality factors...

Life expectancy

An employees insured under her employees group life plan. If she terminates her group coverage which of the statements is incorrect?

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

Employer contributions made to a qualified plan...

Are subject to vesting requirements

A partnership buy sell agreement in which each partner purchases insurance on the life of others partners is called a

Cross purchase plan

What is the official name of the social security program?

Old age survivors disability insurance

And a life settlement contract term does the life settlement broker represent?

The owner

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

The plan must provide offset for Social Security benefits and death benefit is not income taxable

All of the following benefits are available under Social Security except

Welfare benefits

Under simple plans participating employees may defer up to a specified amount of each year and the employers then makes a matching contribution contribution to an amount equal to what percent of the employees annual wages and your wages

3%

Which of the following is true regarding taxation of the cash value in a life insurance policy?

Cash value in excess of the premiums paid is taxed upon policy surrender

All of the following are business uses of life insurance except...

Funding against generally company financial losses

What is the main purpose for the seven-pay test?

Determines if the insurance policy is an MEC (the seven pay test determines whether an insurance policy is "overfunded" or if it's a modified endowment contract) - In other words the cumulative premiums paid during the first seven years of policy must not exceed the total amount of net level premiums that would be required to pay the policy of using guaranteed mortality cost/interest

Under the 401K bonus or thrift plan the employer will contribute....

And undetermined percentage for each dollar contributed by the employee