Taxes, Retirement, and Other Insurance Concepts pt. 2
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? a. Premiums are determined by age, occupation, and individual underwriting b. 100% participation of members is required in noncontributory plans c. each member covered receives a policy d. Coverage cannot be converted when an individual leaves the group
100% participation of members is required in noncontributory plans
To attain currently insured status under Social Security, a worker must have earned at least how many credits during the last 13 quarters? a. 4 credits b. 6 credits c. 10 credits d. 40 credits
6 credits
All of the following are business uses of life insurance EXCEPT a. Compensating executives b. Funding against financial loss caused by the death of a key employee c. Funding business continuation agreements d. Funding against company's general financial loss
Funding against company's general financial loss
Which of the following is an eligibility requirement for all Social Security Disability Income benefits? a. Be at least age 50 b. Have attained fully insured status c. Be disabled for at least 1 year d. Have permanent kidney failure
Have attained fully insured status
What is the main purpose of the Seven-pay Test? a. It ensures that the policy benefits are paid out in 7 years b. It guarantees the minimum interest c. It determines if the insurance policy is a MEC d. It requires level premium payments for 7 years
It determines if the insurance policy is a MEC
A 60-year-old participant in a 401k plan takes a distribution and rolls it over to an IRA within 60 days. Which of the following is true? a. No taxes are due since the plan participant is over age 59 1/2 b. There is a 10% early withdrawal penalty c. The amount distributed is subject to ordinary income tax d. The amount of the distribution is reduced by the amount of a 20% withholding tax
The amount of the distribution is reduced by the amount of a 20% withholding tax
An employee is insured under her employer's group life plan. If she terminates her group coverage, which of the following statements is INCORRECT? a. The premium for individual coverage will be based upon the insured's attained age b. The insured may choose to convert to term or permanent individual coverage c. The insured would not need to prove insurability for a conversion policy d. The insured may convert coverage to an individual policy within 31 days
The insured may choose to convert to term or permanent individual coverage
In a life settlement contract, whom does the life settlement broker represent? a. The insurer b. The beneficiary c. The life settlement intermediary d. The owner
The owner
All of the following statements concerning the use of life insurance as an Executive Bonus are correct EXCEPT a. The policy is owned by the company b. Any type of insurance policy may be used c. The employer pays a bonus to a selected employee to fund the policy d. It is considered a nonqualified employee benefit
The policy is owned by the company
Which of the following insurance arrangements will be appropriate for a parent buying a life insurance policy where the parent is the policyowner? a. A buy-sell agreement b. Family term rider c. Third-party ownership d. An irrevocable beneficiary
Third-party ownership
Which of the following is NOT an example of a business use of Life Insurance? a. Executive Bonuses b. Key Person c. Workers compensation d. Buy-sell Funding
Workers compensation
