Life Insurance CHPT IV

What is the requirement for a number of employees in a SIMPLE plan? A. 100 or more B. 50 or fewer C. no more than 100 D. at least 50

A. 100 or more

The 10% early withdrawl penalty from IRA can be waived for A. catastrophic medical expense B. any type of disability C. withdrawal at age 55 D. a down payment of under 10,000 on a second home

A. catastrophic medical expense

A key-person insurance policy benefit will pay for the following? A.loss of personal income B. works comp C.hospital bills of the key employee D. cost of training replacement

A. loss of personal income

Which of the following is not a requirement of a qualified plan? A. must be temporary B. must have vesting schedule C. cannot discriminate in favor of highly paid employees D. must be written and communicated to all participants

A. must be temporary

Advantage of qualified plan to employers is? A. tax-deductible contribution B. tax free earnings C. no lump-sum payments D. taxable contribution

A. tax deductible contributions

With personal life, the lump-sum death benefit is received by the beneficiary A. tax free B. on a last-in-first-out basis C. as a taxable income D. with taxable interest

A. tax-free

All of the following persons who do not have employer-sponsored retirement plans would be eligible to set up contributions to a traditional IRA EXCEPT? A. Jason, age 26, independent contractor B.Arlene, age 72, nurse C.Marsha, age 40, a proofreader D.Tom, age 60, mechanic

B. Arlene, age 72, nurse

Which of the following are Social Security benefits? A. works comp and unemployment B. accidental death and dismemberment C. retirement, disability, and survivors D. accelerated death benefit

B. accidental death and dismemberment

If a life policy does not pass 7 pay test that policy A. must be cancelled B. becomes Modified Endowment Contract C. is considered limited-pay policy D.must increase its premiums for additional 7 years

B. becomes Modified Endowment Contract

In group life policies, individual certificates are given to A. the policyholder to keep on file B. each insured person C. the group sponsor D. the insurance producer

B. each insured person

Which of the following is NOT true regarding policy loans? A. money borrowed from cash value is taxable B.policy loans can be repaid at death C. insurer can charge interest on outstanding policy employees D.policy loan may be repaid after policy is surrendered

B. policy loans can be repaid at death

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 policyholder? A. a buy-sell agreement B.an irrevocable beneficiary C.third-party ownership D.modified endowment contract

C. third-party ownership

Number of credits required to obtain a fully insured status to receive Social Security benefit is A. 6 B. 10 C.13 D. 40

D. 40

An employee who quits his job and converts his group policy to an individual one. On which of the following will the premium for the individual policy be based? A. experience rating B.original group rate C. insured income D. insureds attained age

D. insureds attained age

Premium paid for life insurance is A. fully tax deductible B.partially tax deductible C. not tax deductible D. taxed

D. taxed