Primerica Study Questions 1
A corporation is the owner and beneficiary of the key person life policy. If the corporation collects the benefit, then
The benefit received is tax free
Which of the following is incorrect concerning a noncontributory group plan?
The employees receive individual policies
An employee quits her job where she has a balance of $10,000 in her qualified plan. If she decides to do a direct transfer from her plan to a Traditional IRA, how much will be transferred from one plan administer to another and what is the tax consequence of a direct transfer?
$10,000 no tax consequence
If $100,000 of life insurance proceeds were used in a settlement option, which paid $13,000 per year for ten years, which of the following would be taxable annually?
$3,000
Social Security was created to provide all of the following benefits EXCEPT
Unemployment income
Group life insurance is a single policy written to provide coverage to members of a group. Which of the following statements concerning group life is correct?
100% participation of members is required in noncontributory plans
An Internal Revenue Code provision that specifically provides for an individual retirement plan for public school teachers is a(n)
403(b) Plan (TSA)
SIMPLE Plans require all of the following EXCEPT
At least 1,000 employees
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
All of the following are personal uses of life insurance EXCEPT
Buy-sell agreement
Which of the following would describe a legal document which would dictate who can buy a deceased partner's share of a business and for what amount?
Buy-sell agreement
A key person insurance policy can pay for which of the following?
Costs of training a replacement
In a direct transfer, how is money transferred from one retirement plan to a traditional IRA?
From trustee to trustee
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 an MEC
What is the official name for the Social Security program?
Old Age Survivors Disability Insurance
Traditional IRA contributions are tax deductible based on which of the following?
Owner's income
If an immediate annuity is purchased with the face amount at death or with the case value at surrender, this would be considered a
Settlement option
An employee has group life insurance through her employer. After 5 years, she decides to leave the company and work independently. How can she obtain an individual policy?
She can convert her group policy to an individual policy without proof of insurability within 31 days of leaving the group plan
The advantage of qualified plans to employers is
Tax-deductible contributions
How are contributions to a tax-sheltered annuity treated with regards to taxation?
They are not included as income for the employee, but are taxable upon distribution
Which of the following is the best reason to purchase life insurance rather than annuities?
To create an estate