Taxes, retirement and other insurance concepts

Pataasin ang iyong marka sa homework at exams ngayon gamit ang Quizwiz!

Which of the following is NOT true regarding a nonqualified retirement plan?

It needs IRS approval.

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

Keogh plan

Which of the following terms means a result of calculation based on the average number of months the insured is projected to live due to medical history and mortality factors?

Life expectancy

Who can make a fully deductible contribution to a traditional IRA?

An individual not covered by an employer-sponsored plan who has earned 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.

All of the following statements are true regarding group insurance EXCEPT

Participants in the policy each receive a policy.

Which of the following would be considered a nonqualified retirement plan?

Split-dollar plan

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

Taxation on accumulation

Which of the following statements about group life is correct?

The cost of coverage is based on the ratio of men and women in the group.

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.

In a life settlement contract, whom does the life settlement broker represent?

The owner

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

The plan must provide an offset for social security benefits.

All of the following are characteristics of a group life insurance plan EXCEPT

There is a requirement to prove insurability on the part of the participants.

Which of the following insurance arrangements will be appropriate for a parent buying a life insurance policy on a child where the parent is the policyowner?

Third-party ownership

Which of the following employees insured under a group life plan would be allowed to convert to individual insurance of the same coverage once the plan is terminated?

Those who have been insured under the plan for at least 5 years

What is the name of the insured who enters into a viatical settlement?

Viator

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

100%

In order to qualify for 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 years

When an employee terminates coverage under a group insurance policy, coverage continues in force

31 days

The president of a manufacturing company has offered one of the company's officers a special individual annuity plan that is unavailable to lower-echelon employees. This plan would be funded with before-tax corporate dollars, and it does not meet government approval standards. This annuity plan is

A nonqualified annuity plan.

Who is a third-party owner?

A policyowner who is not the insured

An employee is joining a group insurance plan. In order to avoid having to prove insurability, what must the employee do?

Join during the open enrollment period

In a single employer group plan, what is the name of the policy issued to the employer?

Master contract

Traditional IRA contributions are tax deductible based on which of the following?

Owner's income

Which type of retirement account does not require the owner to start taking distributions at age 72?

Roth IRA

A 60-year-old participant in a 401(k) plan takes a distribution and rolls it over to an IRA within 60 days. Which of the following is true?

The amount of the distribution is reduced by the amount of a 20% withholding tax.

What type of life insurance is most commonly used for group plans?

Annually renewable term

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.

If an employee wants to enter the group outside of the open enrollment period, to reduce adverse selection, the insurer may

Require evidence of insurability.

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

Self-employed plumber

Employer contributions made to a qualified plan

Are subject to vesting requirements.

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

The policyowner of the life insurance policy

In group life policies, a certificate of insurance is given to

Each insured person

For a retirement plan to be qualified, it must be designed for the benefit of

Employees

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

Which of the following is TRUE of a qualified plan?

It has a tax benefit for both employer and employee.

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

It is approved by the IRS.


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