Qualified plans, and federal tax considerations for life insurance and annuities

What term is used to name the nontaxed return of unused premiums?

Dividend

What is true regarding taxation of dividends in participating policies?

Dividends are not taxable

What is TRUE of a qualified plan?

It has a tax benefit for both employee and employer

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

It is approved by the IRS

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

Surrendering the annuity for cash

Which describes the taxation of an annuity when money is withdrawn during the accumulation phase?

Withdrawn amounts are taxed on a last in, first out basis

What is not a general Information requirements of a qualified plan

The plan must provide an offset for social security benefits

What is not true regarding policy loans?

Money borrowed from the cash value is taxable.

Death benefits payable to a beneficiary under a life insurance policy are generally

Not subject to income taxation by the Federal Government

What part of the internal Revenue code allows an owner of a life insurance policy or annuity to exchange or replace their current contract with another contract without creating adverse tax consequences?

Section 1035 Policy Exchange

What concept is associated with exclusion ratio?

Annuities payments

In life Insurance policies, cash value increases

Grow tax deferred

Traditional IRA contributions are tax deductible based on what?

Owners income

What best describes taxation during the accumulation period of an annuity?

Taxes are deferred

For a retirement plan to be qualified, it must be designed for whose benefit?

Employees