CH4 Flashcards
In order to qualify for conversion from a group life policy that has been terminated to an individual policy of the same coverage, a person must have been insured under the group plan for how manyyears?
A- 3
B- 10
C- 1
D- 5
5
Which of the following is true regarding taxation of dividends in participating policies?
A- Dividends are considered income for tax purposes.
B- Dividends are taxable in some life insurance policies and nontaxable in others.
C- Dividends are not taxable.
D- Dividends are taxable only after a certain amount is accumulatedannually.
C- Dividends are not taxable.
A tax-sheltered annuity is a special tax-favored retirement plan available to
A- Anyone.
B- Certain age groups only.
C- Certain groups depending on factors such as race, gender, and age.
D- Certain groups ofemployeesonly.
D- Certain groups ofemployeesonly.
Who can make a fully deductible contribution to a traditional IRA?
A- Anybody; all IRA contributions are fully deductible regardless of income level
B- An individual not covered by an employer-sponsored plan who has earned income
C- A person whose contributions are funded by a return on investment
D- Someone making contributions to an educational IRA
B- An individual not covered by an employer-sponsored plan who has earned income
All of the following are characteristics of group life insurance EXCEPT
A- Individuals covered under the policy receive a certificate of insurance.
B- Premiums are determined by the age, sex and occupation of each individual certificate holder.
C- Amount of coverage is determined according to nondiscriminatory rules.
D- Certificate holders may convert coverage to an individual policy without evidence ofinsurability.
B- Premiums are determined by the age, sex and occupation of each individual certificate holder.
Which of the following statements about group life is correct?
A- The premiums are higher than in an individual policy because there is no medical exam.
B- The cost of coverage is based on the ratio of men and women in the group.
C- The group sponsor receives a Certificate of Insurance.
D- The policy can be converted to an individual term insurancepolicy
B- The cost of coverage is based on the ratio of men and women in the group.
Which of the following is true regarding taxation of accelerated benefits under a life insurance policy?
A- They are always taxable to chronically ill insured.
B- There is a 10% penalty for early distribution of the death benefit.
C- They are tax free to terminally ill insured.
D- They arealwaystaxed.
C- They are tax free to terminally ill insured.
In a direct transfer, how is money transferred from one retirement plan to a traditional IRA?
A- From trustee to trustee
B- From the original plan to the original custodian
C- From trustee to the participant
D- From the participanttothenewplan
A- From trustee to trustee
