Retirment and other life insurance concepts
An insured decides to surrender his $100,000 Whole Life policy. The premiums paid into the policy added up to $15,000. At policy surrender, the cash surrender value was $18,000. What part of the surrender value would be income taxable?
3,000
An employer has sponsored a qualified retirement plan for its employees where the employer will contribute money whenever a profit is realized. What is this called?
Profit Sharing Plan
All of the following would be different between qualified and nonqualified retirment plans EXCEPT
Taxation on accumation
All of the following employees must use a 403(b) plan for their retirement EXCEPT
The CEO of a private corporation
if 100k of life insurance proceeds were used in a settlement option, which paid 13k per year for ten years, which of the following would be taxable annually?
3k
An Internal Revenue Code provision that specifically provides for an individual retirement plan for public school teachers is a(n)
403(b) Plan (TSA)
Who is a third party owner?
A policyowner who is not the insured
All of the following are examples of third-party ownership of a life insurance policy EXCEPT
An insured borrows money from the bank and makes a collateral assignment of a part of the death benefit to secure the loan
An employee is insured under her employer's group life plan. If she terminates her group coverage, which of the following statements is INCORRECT?
The insured may choose to convert to term to permanent individual coverage
A life insurance policy used to fund an agreement that contracually establishes the intent of someone to purchase a buisness upon the insured business owners death is a
Buy Sell agreement
In group life policies, a certificate of insurance is given to
Each insured person
For a retirement plan to be qualified, it must be designed for whose benefit?
Employees
When an employer offers to gice an employee a wage increase in the amountof the premium on a new life insurance policy, this is called?
Executive bonus
In life insurance policies, cash value increases?
Grow tax deffered
Which of the following is not true regarding a nonqualified retirement plan?
It needs IRS approval
Which of the following statements about group life is correct?
The cost of coverage is based on the ratio of men and women in the group
Who is the owner and who is the beneficiary on a Key Person Life Insurance Policy?
The employer is the owner and the beneficairy
In a life settlement contract, whom does the life settlment broker represent
The owner
All of the following are characteristics of a group life insurance plan EXCEPT
There is a requirment to prove insurability on the part of the partcipants
An individual has been diagnosed with Alzheimer's disease. He is insured under a life insurance policy with the accelerated benefits rider. Which of the following is true regarding taxation of the accelerated benefits?
a portion of the benefit up to a limit is tax free; the rest is taxable income
