Taxes, retirement and other insurance concepts quiz
Who is a third-party owner?
A policyowner who is not the insured
third-party policy
An insurance policy that one person purchases on the life of another person
Life Insurance death proceeds are
Generally not taxed as income
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, and Disability Insurance
The premium paid by the employer in a business life insurance policy are
Tax deductible by the employer
Which of the following is incorrect concerning a noncontributory group plan?
The employees receive individual policies
An employee is insured under her employers group life plant. If she terminated her group coverage, which of the following statements are incorrect?
The individual may convert to term or individual
An employee quits his job on May 15 and doesn't convert his group life policy between individual policy for 2 weeks . He dies in a freak accident on June 1st.? Which is the following statements best describes what will happen?
The insurer will pay the full death benefit from the group policy to the beneficiary
All of the following statements concerning the use of life Insurance as an executive bonus are correct except
The policy is owned by the company
For a retirement plan to be qualified, it must be designed for whose benefit?
employees
All of the following benefits are available under Social Security except
welfare benefits
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 plans for a traditional Aire how much will be transferred from one plan administrator turn another and what is the tax consequences of the direct transfer
10,000, no tax consequences
All of the following examples of third party ownership of a life Insurance policy except
An insured borrowed money from the bank and makes a collateral assignment of a part of the death benefit to secure a loan
Tax sheltered annuity is a special tax- favored retirement plan available to
Certain groups of employees only, like public educators.
A key person insurance policy can pay for which of the following?
Costs of training a replacement