Texas Life and Health
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. Is 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?
$8,000, 60 days
Which of the following is an example of a nonqualified retirement plan?
Executive bonus plan
Who is the owner of the policy and who pays the premium in an Executive Bonus plan?
Executive is the owner, and the executive pays the premium.
Which of the following statements concerning a Simplified Employee Pension plan (SEP) is INCORRECT?
SEPs limit participation to members of closely held corporations.
When do full Social Security retirement benefits begin?
When the worker reaches age 65 and has earned the required amount of work credits.
Which of the following is NOT an example of business uses of Life Insurance?
Workers Compensation
A partnership buy-sell agreement in which each partner purchases insurance on the life of each of the other partners is called a
Cross-purchase plan.
The following are legitimate uses of insurance in a business setting EXCEPT
Funding against general company financial loss.
What is the main purpose of the Seven-pay Test?
It determines if the Insurance policy is an MEC.
In order to qualify for conversion from a group life policy to an individual policy of the same coverage, a person must have been insured under the group plan for how many years?
5
When a beneficiary receives payments consisting of both principal and interest portions, which parts are taxable as income?
Interest only
Which of the following would be a unique benefit life insurance has over other types of insurance?
It performs the function of cash accumulation
Which of the following is NOT true regarding policy loans?
Money borrowed from the cash value is taxable.
Which of the following are Social Security benefits?
Retirement, Disability and Survivors
What are the personal uses of life insurance?
Survivor protection, estate creation and conservation, cash accumulation and liquidity
