Life 4 (10, 12 & 14)

Shaka Kahn, who has $20,000 of group life insurance, has just terminated his employment. The maximum amount that Mr. Kahn will be able to convert is

$20,000

Sitting Bull was "currently insured" under Social Security when he died. His spouse will receive:

$255.00

The lump sum death benefit payable under social security is:

$255.00

Regarding eligibility requirements in a group life plan, for the plan to receive favorable tax treatment the government requires the plan to cover what percentage of the eligible employees?

70%

A Coverdell Savings Account is:

An after tax savings vehicle for education

At what time can a person continue working without fear of having their social security check reduced?

FRA

What is the maximum age that the earnings test for social security retirement benefits could be applied?

FRA

All the following are examples of non-qualified plans except:

simple plans

All of the following are eligible for Social Security except:

railroad workers

Which is not the primary purpose of Key Person insurance?

tax deductible premiums

Life insurance can be used in businesses for all the following ways except:

as a profit sharing plan

An employer is paying $450 for $75,000 of group life insurance on it's employees, broken down as follows: The cost for the first $50,000 is $300, the cost for the next $25,000 is $150. Which of the following statements are true?

$150 will be included as compensation

If an employer pays the group life insurance premium, the employee does not have to list the premium as income if the amount is between

0 - $50,000

What is the minimum number of employees required in Florida for group insurance?

1

Which of the following is/are true about GROUP LIFE?1. Group life is not concerned with the selection of individual risks, but rather the selection of risks by classification.2. The group life policy must be incidental to the group's purpose.3. Each insured receives his/her policy as proof of insurance.

1 & 2

Which of the following might not be covered by Social Security?1. Railroad workers covered under the Railroad Retirement System2. Civil Service workers hired after 19843. Approximately 25% of state & local government employees

1 & 3

Florida Law requires what percentage of participation in a non-contributory group life plan?

100%

Which of the following statements concerning Multiple Employer Trusts (METs) are true?1. They are designed for employers with a large number of employees.2. They may be self-funded or funded with contracts from insurance companies.3. The employer must join the trust.4. Employees receive a policy.

2 & 3

Lightning Joe died leaving behind a wife, Thunderhead, age 35, and their 12 year son, Cumulonimbus. Thunderhead's blackout period will be for how long?

21 year

Karen is 30 years old. She has a daughter age 10. If Karen's husband were to die, the blackout period would last how long?

24 years

Floyd, who has $2,000 of group life insurance, has just terminated his employment. Floyd has how many days in which to convert his group coverage to individual coverage?

31

Types of groups approved for group insurance include:

All of the above

Social Security benefits are based upon a worker's :

Average Indexed Monthly Earnings (AIME)

All of the following statements concerning Deferred Compensation plans are correct except

Contributions may be tax deducted.

Which of the following statements regarding Coverdell Education Savings Accounts are true?

Contributions must be made before the beneficiary turns 18

Which of the following describes the favored tax treatment to the business of Key Employee life insurance

Death proceeds are received by the business tax free

The period of time following the death of a breadwinner during which the children are living at home is a/an:

Dependency period

Qualification for Social Security disability benefits requires a waiting period of how long?

Five months

A Multiple Employer Welfare Arrangement (MEWA) is all of the following except:

Fully Insured

The following types of GROUP LIFE plans are available EXCEPT:

Group deferred life plans

Which of the following is not considered a group permanent plan?

Group single payment insurance

The minimum number of employees who may constitute a group for insurance purposes is specified under which law(s) or rule(s)?I. Federal LawsII. State LawsIII. Life insurance company underwriting rules

II & III

In the needs approach, all of the following sources of income should be taken into account except

Income from term insurance

The human life value tried to measure what a life was worth in economic value to a family. Which of the following statements would be true of this approach?

Inflation was not taken into account.

What type of benefits does a Multiple Employer Welfare Association provide?

Insurance

Which of the following is not true concerning blanket insurance?

Insureds receive a policy

Which of the following statements is true concerning split-dollar insurance?

It is a method of purchasing insurance.

All of the following would be considered an employee benefit except:

Key Person Life Insurance

Which of the following statements concerning social security benefits is true?

Michael retired at age 65. He has a 15 year old totally disabled daughter and a wife, age 45. The child will receive income for life. The wife also will receive a monthly benefit, even though she is under age 62.

All of the following statements concerning group credit life are true except:

Premiums are paid entirely by the creditor.

Which of the following pertaining to Group Credit Life Insurance is correct?

Premiums are paid wholly by the insured.

Concerning Buy/Sell Plans in a corporation, with 3 equal stockholders, how many policies would be needed?

Stock Redemption - 3 policies

Which of the following is not true concerning the FICA tax?

The FICA tax has no limits as to the retirement portion.

Which of the following is true concerning key person life insurance?

The cash values are listed as an asset on the company's balance sheet.

Which of the following best describes the normal conversion benefit available to terminated employees under a group life insurance policy?

The employee may convert to an individual whole life policy within 31 days without submitting evidence of insurability.

Which of the following statements concerning deferred compensation and salary continuation plans are correct?

The employer funds the salary continuation plan, the employee funds the deferred compensation plan.

All the needs that arise when a breadwinner dies arise when the breadwinner becomes disabled except:

The final expense fund

For a group life plan to receive favorable tax treatment, the government imposes certain requirements to ensure that the rank-and-file employees are not discriminated against. Which of the following statements regarding eligibility requirements is not correct?

The life insurance must be the same amount for all.

A buy-sell agreement was established for a $300,000 partnership with 3 equal partners. Assuming a cross-purchase agreement, which of the following statements is true?

The partners purchases 6 policies for $50,000.

Which of the following statements concerning social security disability benefits is true?

There is a 5 month waiting period to apply for benefits.

Which of the following concerning deferred compensation plans is not correct?

They are qualified plans

All the following statements concerning deferred compensation plans are correct except:

They receive favorable tax treatment from the IRS.

For whom is the entity plan best suited?

a partnership with many partners

A plan, usually funded by life insurance, to purchase a deceased partner's share of a business is known as a:

buy / sell agreement

All of the following are covered under the social security system except:

certain railroad workers

Under SOCIAL SECURITY, a covered worker's PIA is:

equal to the full retirement benefit

Lanny, covered under his company's group life plan, was terminated June 1. He died June 15. His life insurance policy will pay:

full benefit

A MEWA is not:

fully insured

Which is not considered a group permanent plan?

group credit life

In a typical split-dollar policy the employer and the employee split the cost of the insurance. On an annual basis, the employer's outlay is equal to the:

increase in cash value

In order to qualify for favorable tax treatment, group life policies:

must have at least 85% of the participants be non-key employees.

If a group life insurance contract is canceled the insurance company

must notify the employees but can take this action by notifying the employer

With a Key Employee insurance policy, who is normally the beneficiary?

the business

In a three-person partnership, a buy/sell Cross-Purchase plan requires each partner to purchase how many life insurance policies?

two policies