Policy Loans

in a defined contribution plan

The contribution is known and the benefit is unknown.

Which of the following characteristics applies to defined benefit plans but not defined contribution plans?

the amount of contributions made by the employer is determined by an actual formula

An insured requests a loan from her life insurance policy to pay a premium that is due. The insurer may delay that request for how many months?

0

Once the person meets the stringent requirements for disability benefits under Social Security, how long is the waiting period before any benefits will be paid?

5 months

Richard is the Vice-President of a major toy company. The President of the company has offered him a special individual annuity plan that is unavailable to lower-echelon employees. This plan would involve using before-tax corporate dollars to fund, and it does not meet government approval standards. This annuity plan is

A nonqualified annuity plan

An insurer may delay or defer a request for a policy loan for up to 6 months unless the loan is made for the purpose of paying

A premium that is due

If a retirement plan or annuity is "qualified," this means

approved by the IRS

Which of the following is an eligibility requirement for all Social Security Disability Income benefits?

have attained fully insured status

Which of the following is true about a defined benefit plan?

high-salaried employees with only a few years until retirement receive the highest contribution

A maximum family benefit is established for each level of average earnings and is updated

larger of the two benefits not the total of the two benefits

Which of the following would be considered a nonqualified retirement plan?

split dollar plan

All of the following statements concerning an employer sponsored non-qualified retirement plan are true EXCEPT

the employer can receive a current tax deduction for any contributions made to the plan

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

If a policy has lapsed due to nonpayment of a policy loan, how much written notice of cancellation will the policyowner get?

30 days

Which of the following statements concerning a Simplified Employee Pension plan (SEP) is INCORRECT?

SEPS are suitable for large companies

All of the following employees may use a 403(b) plan for their retirement EXCEPT

The CEO of a private corporation

What limits the amount that a policyowner may borrow from a whole life insurance policy?

cash value

Which of the following components must a life insurance policy have to allow policy loans?

cash value

All of the following apply to defined benefit plans EXCEPT

contributions are tied to the company

All of the following are examples of social insurance EXCEPT

long-term care

Which of the following is NOT a factor in determining qualifications for Social Security disability benefits?

occupation

Social Security Retirement Benefits are available to all of the following persons EXCEPT

retirees age 59 1/2

Monthly payments to workers age 62 or older who have worked long enough under the Social Security System to become fully insured are

retirement benefits

when must a life insurance policy loan be repaid?

the time is not specified so long as the total indebtedness does not exceed the policy cash value

Social security benefits are available for a surviving spouse until the youngest child reaches age 16. Benefits are again available for the spouse after reaching age 60. What is the time period called during which the surviving spouse does not receive benefits?

blackout period

Jacob is insured by Social Security and his wife and children are all entitled to receive benefits. What kind of limitations will Jacob's family run into?

maximum family benefits

When do full Social Security retirement benefits begin?

65 and has earned the required amount of work credits

Ed take out a loan on his life insurance but killed shrotly after and the debt is left unpaid

an amount equal to the loan plus interest due will be deducted from the death benefit

Interest rates on policy loans are classified as

fixed or variable

If an insured worker has earned 40 quarters of coverage, the worker's status under Social Security disability is

fully insured

If a worker is insured by Social Security and several of his or her family members are entitled to receive benefits, the family my run up against an overall limitation on benefit payments called

maximum family benefits

Who would be eligible to obtain SGLI?

military personnel

when would unpaid interest be added to a policy loan balance

on the policy anniversary date

Business insurance may be the source of funds for the business by the use of

policy loan

all of the following are true regarding insurance policy loans except

policy loans can be made on policies that do not accumulate cash value

Which type of retirement account does not require the owner to start taking distributions at age 72?

roth ira

Who may contribute to a KEOGH (HR-10) plan?

self employed plumber

If the irrevocable beneficiary of a life insurance policy becomes legally incompetent and cannot perform any legal act, the policyowner could obtain a loan for the benefit of

that beneficiary

If a policy loan or the interest on a policy loan is not paid, this amount is added to the indebtedness on the policy. If the policy loan and the interest become greater than the total cash value of the policy, the policy will

Lapse

All of the following statements are true regarding tax-qualified annuities except

Employer contributions are not tax deductible

To prevent the loss of investment income for the insurer, policyowners receiving a loan from the cash value of a policy are charged a

rate of interest

an insurer may delay or defer a request for a policy loan for up to

6 months

Employer contributions made to a qualified plan

are subject to vesting requirements

In terms of Social Security, what is the interval spanning between the day when the youngest child of a family turns 16 and before the surviving spouse turns age 60 called?

blackout period

Two attorneys operate their practice as a partnership. They want to start a program through their practice that will provide retirement benefits for themselves and three employees. They would likely choose

HR-10

Ed takes out a loan on his life insurance policy. He is killed in a car accident shortly thereafter, so the debt is left unpaid. Which of the following will happen?

an amount equal to the loan plus interest due will be deducted from the death benefit

in the event of a policy surrender, any outstanding debts on the policy may be deducted from the cash value and the difference may be used to purchase

reduced paid up insurance