Chapters 9-11 Flashcards
The time at which the retirement account truly belongs to the employee
Vesting
Allows the employee to defer some of their current salary to provide for their retirement
Cash or Deferred Arrangement Plans (CODA)
A contract offered by the life insurance industry that provides stipulated payments at regular intervals (usually monthly) for the life of the
annuitant with no refund provisions, once the annuitant dies. Also called straight life income annuity or straight life annuity
Life Annuity
A personal tax-advantaged savings account in which eligible individuals can contribute up to a certain amount each year.
Individual Retirement Account (IRA)
With an annuity, it is the period of time, usually before retirement and withdrawals, that the annuitant is paying premium that accumulates
interest tax deferred
Accumulation Period
A premium that remains unchanged, fixed, constant, or guaranteed for the life of the policy.
Level Premium
A life insurance policy or annuity that is paid in full with one premium at the beginning of the contract
Single Premium
A premium method that allows the amount and timing to vary upon the policyholder’s discretion.
Flexible Premium
An annuity contract that pays income benefits after a single premium is received
Immediate Annuity
An annuity contract that will not pay the income benefits until a later date (usually when the annuitant reaches retirement age)
Deferred Annuity
A contract offered by the life insurance industry that provides stipulated payments at regular intervals (usually monthly) for the life of the
annuitant with no refund provisions, once the annuitant dies.
Life/Straight Life Annuity
A contract offered by the life insurance industry that provides stipulated payments at regular intervals to two or more annuitants as long as one of them lives (survives)
Joint and Survivor Annuity
A type of annuity that guarantees the interest rate on annuity premiums and the amount of annuity payments received. It does not guarantee, though, to keep pace with inflation.
Fixed Annuity
A type of annuity that does not guarantee the interest rate on annuity premiums or the amount of annuity payments received. It allows, though, for the possibility of annuity payments to keep pace with
inflation
Variable Annuity
Insurance company’s account for investing policyholder premiums in safe and conservative investments.
General Account
A type of fixed or guaranteed annuity that offers excess interest based on the insurance company’s investment of premium compared to a stock
index, such as the S&P 500 index.
Equity-Indexed Annuity
A retirement plan that has not been approved by the IRS; therefore, does not receive favorable tax treatment
Nonqualified Retirement Plan
A retirement plan that has been approved by the IRS; therefore, receives favorable tax treatment.
Qualified Retirement Plan
Type of qualified retirement plan for the self-employed and their employees
Keoghs Plans
A policy that covers persons with a common affiliation of interest such as an employer group, under one master policy.
Group Insurance
A life or health policy covering a valuable employee whose absence would financially hurt the business. The key person is the insured and the business is the policyowner
Key Person Insurance
Issued by group contracts (typically employer groups) that summarizes coverage to insured employees
Certificate of Coverage
A group insurance policy in which the policyowner (an employer) and insureds (employees) share the cost of the plan. Generally, insurance
companies will require 75% or more of all eligible employees to participate.
Contributory Plan
A group insurance policy in which the policyowner (the employer) pays the entire premium for employees’ benefits. The plan must insure 100% of all eligible employees.
Noncontributory Plan
Group term to individual life without proof of insurability
Conversion Privilege
A voluntary plan offered by an employer that allows employees to pick and choose among various types of insurance coverages, such as
medical expense, dental, vision, life, disability income, critical illness, and long-term care.
Worksite Insurance Plans
The monthly amount you will receive if you start your benefits at your full retirement age
Primary Insurance Amount
Mandatory insurance purchased by almost all employers to cover an
employee’s injury, disability, death, or medical expenses due to occupational causes.
Worker’s Compensation
The federal program that is formally called Old Age, Survivors and Disability Income Insurance, but commonly known as Social Security. It
provides benefits for retirement, death or disability.
Social Security
A status of limited eligibility under Social Security that provides only death benefits
Currently Insured
A status of eligibility under social security that provides for complete benefits.
Fully Insured
A type of business continuation plan that gives the remaining business owner(s), the predetermined legal right to purchase a disabled owner’s
interest at a predetermined price. Proceeds to purchase the disabled owner’s interest come from a disability income policy.
Disability Buy-Sell Agreement
A period of time when Social Security survivor benefits are not available to the surviving spouse and/or children.
Blackout Period
