Chapter 4 Life Insurance Missed Questions
group life insurance is a single policy written to provide coverage to members of a group. WHich of the following statements concering group life is CORRECT
100% participation is required for noncontributory plans
An insured decides to surrender his $100,000 Whole Life policy. The premiums paid into the policy added up to $15,000. At policy surrender, the cash surrender value was $18,000. What part of the surrender value would be income taxable?
3,000
To attain currently insured status under Social Security, a worker must have earned at least how many credits during the last 13 quarters?
6 credits
life insurance death proceeds are
Generally not taxed as income
official name for the Social Security Program
Old Age Survivors Disability Insurance
which of the following statements concerning a SEP (Simplified Employee Pension Plan) is INCORRECT
SEP's are more suiitable for large companies
Who can make a fully deductible contribution to a traditional IRA?
an individual not covered by an employer sponsored plan who has earned income
Partners in a business enter into a buy-sell agreement to purchase life insurance, which states that should one of them die prematurely, the other would be financially able to buy the interest of the deceased partner. What type of insurance policy may be used to fund this agreement?
any form of life insurance can fund a buy-sell agreement
all of the following are TRUE of the federal tax advantages of a qualified plan EXCEPT
at distribution, all amounts received by the employee are tax free
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
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 atleast 5 years
all of the following are available under Social Security EXCEPT
welfare benefits
what percentage of a company's employees must take part in a noncontributory group life plan?
100%
which of the following is the required number of participants in a contributory group plan?
75%
in life insurance policies, cash value increases
Grow tax deferred.
when an employer offers to give an employee a wage increase in the amount of the premium on a new life insurance policy, this is called an
executive bonus
which of the following is an eligibility requirement for all Social Security Disability Income benefits
have attained fully insured status
what is the main purpose of the Seven Pay Test
it determines if the insurance policy is a MEC
If a retirement plan or annuity is "qualified", this means
it is appproved by the IRS
If a life insurance policy develops cash value faster than a seven-pay whole life contract, it is
modified endowment contract
traditional IRA contributions are
tax deductible
all of the following employees may use a 403b plan for their retirement EXCEPT
the CEO of a private corporation
a corporation is the owner and beneficiary of the key person life policy. If the corporation collects the policy benefit, then
the benefit is received tax free
which of the following is INCORRECT concerning a noncontributory group plan?
the employees receive individual policies
all of the following statements concerning an employer sponsored nonqualified retirement plan are true EXCEPT
the employer can receive a current tax deduction for any contributions made to the plan
who is the owner and who is the beneficiary on a Key Person Life Insurance policy
the employer is the owner and the beneficiary
