Life insurance Chapter 6 pt. 2

An employee quits her job where she has a balance of $10,000 in her qualified plan. The balance was paid out directly to the employee in order for her to move the funds to a new account. If she decides to rollover her plan to a Traditional IRA, how much will she receive from the plan administrator and how long does she have to complete the tax-free rollover?

8000$, 60 days

If an annuitant dies during the accumulation period, what benefit will be included in the annuitant's estate?

Accumulated cash value

Which concept is associated with "exclusion ratio"?

Annuities payments

Which concept is associated with "exclusion ratio?"

Annuities payments

which of the following is not true of section 1035 policy exchanges?

Any exchange made under section 1035 of the internal Revenue Code must be completed within 30 days.

Employer contributions made to a qualified plan

Are subject to vesting requirements

When must an IRA be completely distributed when a beneficiary is not named?

Dec. 31, of the year that contains the fifth anniversary of the owner's death

All of the following statement are true regarding tax qualified annuities except

Employer contributions are not tax deductible

Which of the following is true of a qualified plan?

It has a tax benefit for both the employer and employee

If an insured surrenders his life insurance policy, which statement is true regarding the cash value of the policy?

It is only taxable if the cash value exceeds the amount paid for premiums.

Which of the following is not true regarding a non qualified retirement plan?

It needs IRS approval

Which of the following is not true regarding policy loans?

Money borrowed from the cash value is taxable

What type of annuity activity will cause immediate taxation of the interest earned?

Surrendering the annuity for cash

Which of the following best describes taxation during the accumulation period of an annuity?

Taxes are deferred

A 60 year old participant in a 401 K plan takes a distribution and rolls it over to an IRA within 60 days. Which of the following is true?

The amount of the distribution is reduced by the amount of a 20% withholding tax.

Which of the following describes the tax advantage of a qualified retirement plan?

The earnings in the plan accumulate tax deferred

J transferred his life insurance policy to his son two years before his death. Which of the following is true?

The entire face value of the policy will be included in J's Taxable estate.

J transferred his life insurance policy to his son two years before his death. Which of the following is true?

The entire face value of the policy will be included in J's taxable estate

If an immediate annuity is purchased with the face amount at death or with the cash value at surrender, this would be considered a

settlement option

All of the following would be different between qualified and non qualified retirement plans except:

taxation and accumulation