Chapter 4. Retirement and Other Insurance Concepts Flashcards
Who owns a group life insurance contract?
The employer (also known as the sponsor of the group)
What type of policy is typically issued without proof of insurability from the insured?
Group policy
In qualified plans, are employer contributions taxed as income to the employees?
No, employer contributions are not taxed as income to the employees
Is the death benefit of a life insurance policy taxed to the beneficiary if it’s received as a lump sum?
No, lump-sum benefits are received tax free.
When planning for survivor protection in life insurance, what needs to be considered?
The insured’s current assets, liabilities and survivor’s needs
SIMPLE plans are available to groups of how many employees?
No more than 100
Group life insurance policies are written as what type of insurance?
Annually renewable term
Who would be considered a third-party owner?
An individual or an entity who is not the insured
What are the characteristics of the group that underwriters will consider before issuing a group life policy?
Group’s purpose, size, financial strength and turnover
If an insured terminates membership in group life insurance, to what type of insurance can the insured convert the coverage?
Whole life
What are the three types of Social Security benefits?
Retirement, disability and survivors
What are some examples of qualified plans?
IRA, 401(k), HR10 (Keogh), SEP, SIMPLE
Who qualifies for tax-sheltered annuities, or 403(b) plans?
Employees of nonprofit organizations under Section 501(c)(3) and employees of public school systems
In what form of payment must the contributions to a traditional IRA be made?
In cash (or cash equivalents)
What are the personal uses of life insurance?
Survivor protection, estate creation and conservation, cash accumulation and liquidity
