(Life) Retirement and other concepts

(self employed plans) to be covered under Keogh, person must be self-employed or partner working part or full time who owns _% of business

10

employee usually has _ days after terminating from group to use conversion

31

LIFE SETTLEMENT, owner sells existing life policy to

3rd party

situations where contract owned by someone other than insured

3rd party

(social security) fully insured refers to someone whos earned _ quarters of coverage

40

(Roth IRA) grow tax free as long as account open for at least _ yrs

5

if master contract terminated, every person on plan for _ yrs can convert

5

(IRA) age _ or older can make catch up contributions

50

(IRA) withdraws prior to age _ considered early, subject to 10% tax

59.5

(Roth IRA) excess contributions subject to _% tax penalty

6

(social security) person can get currently insured status and qualify for benefits if they've earned _ credits thru 13 quarters

6

(social security) retirement benefits begin when worker earned req credits AND reaches age

65

all are reqs for social security benefits except being

65

disability benefits available for fully insured worker who is totally and permanently disabled prior to age

65

to determine if policy overfunded IRS established

7 pay test

(IRA) starting at age _, owner must receive at least a minimum annual amount, known as REQUIRED MINIMUM DISTRIBUTION (RMD)

72

(Roth IRA) distributions do NOT have to begin at age

72

(social security) if individual entitled to Medicare part a, automatically get part

B

principle under which its assumed that funds paid into policy FIRST will be paid out FIRST

FIFO

(retirement plans) employee sponsored QUALIFIED PLAN is approved by

IRS

policy loans borrowed from cash value is or isnt taxable

IS

money borrowed against cash value is or isnt income taxable

ISNT

(self employed plans) HR10 or _ plans make it possible for self employed people to be covered under IRS plan

Keogh

(self employed plans) anyone at least 21, worked for self employed person 1+ yrs, worked at least 1000 hrs MUST be included in _ plan

Keogh

(self employed plans) contribution limits are _ of established dollar limit or 100% of earned income

LESSER

principle applied to asset management in life insurance products, under which its assumed funds paid into policy LAST paid out FIRST

LIFO

failing the 7 pay test means classified as an _

MEC

accelerated benefits are taxable or no

NO

policy loans taxable or not to business

NO, NOT TAXABLE

how are contributions to tax sheltered annuity treated with regards to taxation?

NOT included as income for employee, taxable upon distribution

true concerning taxation of premiums in key person life insurance policy?

NOT taxable as business expense

social security also called

OASDI

(social security) amount of benefits worker will receive under social security is called

PIA primary insurance amount

(social security) type and amount of benefits determined by amount of credits or _ worker earned

QCs

_ plan is suited for small employer or self employed

SEP

_ plan is for small businesses w/ <100 employees who get less than $5000 in compensation

SIMPLE

once MEC, always MEC, true or false

TRUE

life settlement would require an _ assignment

absolute

participant in 401k rolls over distribution within 60 days, which is true

amount of distribution reduced by amount of 20% withholding tax

group life is _ renewable term insurance

annually

corporation is owner and benefit of key person policy. if corporation collects benefit, then

benefit is tax free

any activity relating to solicitation and sale of life settlement contract to 3rd party with no insurable interest in insured

business of life settlement

agreement that determines what will be done with a business in the event an owner dies or becomes disabled

buy-sell (business continuation)

what does liquidity refer to in life insurance?

cash values can be borrowed

tax sheltered annuity is special plan available to

certain employee groups

when premiums for group shared between employer and employees, plan is called

contributory

true regarding group life?

cost of coverage based on ratio of men and women in group

used in partnerships when each partner buys policy on other

cross purchase

(executive bonus) since employer treated premium as bonus, tax _ for employer, NOT for employee

deductible

premiums NOT tax

deductible

premiums that employer pays for life insurance on employee are tax _ to employer as business expense

deductible

(simple plan) taxation is

deferred

cash values grow tax

deferred

what part of surrender income would be income taxable?

difference between premium paid and cash value

taxes must be paid upon contribution or _, NOT BOTH

distribution

(retirement plans) IRA and Roth IRA lets individuals with an _ income contribute

earned

for retirement plan to be qualified, must be designed to benefit

employees

all are true regarding tax qualified annuities except

employer contributions not tax deductible

used when partnership buys policies on partners

entity purchase

purchase of life insurance creates immediate

estate

arrangement where employer offers to give employee wage increase in amount of premium on new life insurance policy on employee

executive bonus

policy death benefits paid under business owned or employer provided life policy are received income tax _ by beneficiary

free

(retirement plans) nonqualified plans require no _ approval and let employer discriminate for valuable employee

gov't

(life settlement) with terminal illness/short life expectancy, owner can sell policy to settlement provider for _ amount than what would be received if surrendered for cash value

greater

issued to sponsoring organization, covers multiple members of group

group life insurance

cash value of business owned life insurance policy accumulates on tax-deferred basis and taxed same as _ policy

individual

if employee terminates membership in insured group, employee has right to convert to individual policy WITHOUT proving _

insurability

risk of premature death of key employee can be lessened with

key person insurance

any financial transaction where owner of life policy sells policy to 3rd party for some form of compensation, usually cash

life settlement

person who, for compensation offers to negotiate life settlement contract

life settlement broker

establishes terms under which life settlement provider will pay compensation to policyowner

life settlement contract

person other than owner who enters into life settlement contract WITH owner

life settlement provider

policy cash values can be borrowed against at any time and used for immediate needs

liquidity

when employer pays all premiums, plan is called

noncontributory

403b or TSAs is for employees of certain _ orgs

nonprofit

life insurance proceeds paid to named beneficiary usually _ if paid in lump sum

nontaxable

(IRA) _ may withdraw funds at any time

owner

refers to owner of life insurance policy who seeks to enter life settlement contract

owner

true regarding key person EXCEPT

plan funded by permanent insurance only

life settlement brokers ONLY represent

policyowners

tax free distribution of cash from 1 retirement plan to another

rollover

withdrawal of money from one qualified plan and placed into another

rollover

ira purchased by small employer to cover employees known as

simplified employee pension plan

(group life) master policy issued to _ of group

sponsor (employer)

used by privately owned corporations when each stockholder buys a policy on EACH of the others

stock purchase

used when corporation buys one policy on each shareholder

stock redemption

early termination of policy by policyowner

surrender

_ benefits paid to workers surviving spouse and dependent children under specific circumstances

survivor

providing funds necessary for survivors of insured to be able to maintain lifestyle in case of insured death

survivor protection

employer contributions for profit sharing and 401K must be

systematic and substantial

(Roth IRA) funded with after _ contributions

tax

(retirement plans) qualified plans have _ advantages

tax

if cash surrender value exceeds amount of premiums paid for policy could be

taxable

interest on dividends is

taxable

settlement options, payments consist of principal and interest, interest portion is _ as income

taxable

all of following would be different between qualified and nonqualified retirement plans except

taxation on accumulation

group life CANNOT be converted to

term

tax free transfer of funds from 1 retirement program to IRA or transfer of interest from 1 trustee to another

transfer or direct transfer

right of participant in retirement plan to retain part or all benefits

vesting