Kentucky Life Only (Focused Concepts)
If a person is disabled at age 27 and meets Social Security's definition of total disability, how many work credits must he/she have earned to receive benefits?
12 credits Persons disable between ages 24 and 31 can qualify for benefits if they have credit for having worked half of the time between age 21 and the start of the disability. For example, if Joe becomes disabled at age 27, he would need 12 credits (or 3 years' worth) out of the prior 6 years (between ages 21 and 27).
Under SIMPLE plans, participating employees may defer up to a specified amount each year, and the employer then makes a matching contribution up to an amount equal to what percent of the employee's annual wages?
3% Under SIMPLE plans, participating employees may defer up to a specified amount each year, and the employer can then contribute up to an amount equal to 3% of the employees' annual compensation. Contributions and earnings are both tax-deferred until funds are withdrawn.
A key person insurance policy can pay for which of the following?
Costs of training a replacement A key person insurance policy will pay for costs of running the business and replacing the employee.
Which of the following is NOT an example of insurable interest?
Debtor in creditor THE THREE RECOGNIZED AREAS in which insurable interest exists are as follows: 1) a policyowner insuring HIS/HER OWN LIFE; 2) the life of a FAMILY MEMBER (relative or spouse); 3) or the life of a business partner, key employee, or someone who has a financial obligation to them. A debtor does not have an insurable interest in the creditor.
If a contract provides a set amount of income for two or more persons with the income stopping upon the first death of the insured, it is called a
Joint life annuity Joint life annuity settlement option pays benefits to two or more annuitants, but stops upon the death of the first.
L&D Insurance's cost of operating for this year was less than they assumed. They can now use the money they saved to pay life insurance dividends, which is called
Operating Expenses Operating expenses (loading) is when the cost of operating the company is less than assumed. When the company experiences a savings in cost of doing business, it is able to return a portion of the premiums collected as a dividend.
Which settlement option provides a single beneficiary with income for the rest of his/her life?
Single Life The Single Life Option provides a single beneficiary with income for the rest of his/her life.
The clause that allows a third party to control a policy until a minor reaches the age of majority is called
The applicant control clause. The applicant control clause allows the third party to own and control the policy until the minor insured reaches the age of majority.
Who is the owner and who is the beneficiary on a Key Person Life Insurance Policy?
The employer is the owner and beneficiary. With the key-person coverage, the business (the employer) is the applicant, owner, premium payer, and beneficiary.
Some persons become eligible to receive more than one Social Security benefit. They may qualify for retirement benefits based on their own earnings, and they may also be eligible for benefits based on the earnings of a spouse. In such cases, the person is entitled to receive
The larger of the two benefits, not the total of the two benefits. In such cases, the person is entitled to receive the larger of the two benefits, not the total of the two benefits.
A rider that may be attached to a life insurance policy that will adjust the face amount based upon a specific index, such as the Consumer Price Index, is called
Cost of Living Rider A "cost of living" rider adjusts the face amount of a policy to maintain the relationship of the face amount and increases in the cost of living.
A long stretch of national economic hardship causes a 7% rate of inflation. A policyowner notices that the face value of her life insurance policy has been raised 7% as a result. Which policy rider caused this change?
Cost of Living Rider The Cost of Living rider annually adjusts the policy's face value in accordance with the national rate of inflation or deflation. This rider adjusts the face amount of the policy to correspond with the rate of inflation, in order to keep the initial value of the policy constant over time.
What characteristic makes whole life permanent protection?
Coverage until death or age 100 Whole Life policies are referred to as permanent protection, since as long as the premium is paid coverage will continue for the life of the insured or till the insured's age 100.
A policy which pays monthly income upon the death of the breadwinner for a predetermined number of years after death, plus a lump sum at death, and combines level term and whole life is known as which policy?
Family maintenance Whole life pays a lump sum, and level term pays monthly benefits for the predetermined years of the policy.
Which of the following are established by the employer to provide specific benefits to eligible employees at retirement?
Pension plans Pension plans are either defined benefit or defined contribution plans that are established by the employer to provide specific benefits to eligible employees at retirement. Individuals must meet certain minimum service requirements to be eligible for benefits. A normal retirement age is specified in the pension contract, with provisions for either an early retirement with reduced benefits or a deferral of retirement, which would increase benefits.
