Dont Know’s Pt III Flashcards
What does a 401(k) plan generally provide its participants?
Salary deferral contributions
What is the excise tax rate the IRS imposes on individuals aged 70 1/2 or older who do not take the required minimum distributions from their qualified retirement plan?
50%
What is the maximum number of employees (earning at least $5000) that an employer can have in order to start a SIMPLE retirement plan?
100
What determines the full amount of Social Security retirement benefits a qualified individual is entitled to receive?
Primary insurance amount (PIA)
An employee requested that the balance of her 401(k) account be sent directly to her in one lump sum. Upon receipt of the distribution, she immediately has the funds rolled over into an IRA. What is the tax consequence of the distribution sent to the employee?
Distribution is subject to federal income tax withholding
How are Roth IRA distributions normally taxed?
Distributions are received tax-free
Post-tax dollar contributions are found in:
Roth IRA investments
A trustee to trustee transfer of rollover funds in a qualified plan allows a participant to avoid:
Mandatory income tax withholding on the transfer amount
An individual participant personally received eligible rollover funds from a profit-sharing plan. What is the income tax withholding requirements for this transaction?
20% is withheld for income taxes
Which of the following BEST describes how pre-admission certifications are used?
Used to prevent nonessential medical costs
Which of the following involves analyzing a case before admission to determine what type of treatment is necessary?
Prospective review
A disability elimination period is best described as a:
Time deductible
In a disability income policy, which of these clauses acts as a deductible?
Elimination period
Which of the following is not a required provision in group life policies?
Right to loan
A $20,000 life insurance policy application is completed, however the producer does not collect the initial premium. At what point does the coverage go into effect?
When the applicant receives the policy and pays the initial premium
An underwriter determines that a life insurance applicant’s risk should be reclassified due to a health issue. This policy may be issued with a(n):
Extra premium
All of these statements about Equity Indexed Life Insurance are correct, EXCEPT:
The premiums can be lowered or raised, based on investment performance
A provision in a life insurance policy that pays the policyowner an amount that does not surpass the guaranteed cash value is called the:
Policy Loan Provision
Which of these is an element of a Variable Life policy
A fixed, level premium
Which statement is TRUE regarding a Variable Whole Life policy?
A minimum guaranteed death benefit is provided
Variable Life products require a producer to
Hold a life insurance license and a securities license
K is an annuitant currently receiving payments. If she were to die before receiving payments equal to the correct value, a beneficiary will continue receiving payments until an amount equal to the contract value has been paid. This is called a(n):
Installment refund annuity
Whole life insurance policies are contractually guaranteed to provide each of the following, except:
Partial withdrawal features beyond a surrender charge period
A policy loan is made possible by which of these life insurance policy features?
Cash value provision
M has an insurance policy that also has an outstanding policy loan at the time of M’s death. The insurer will deduct the outstanding loan balance from the:
Policy proceeds
All of the following statements regarding a Tax Sheltered Annuity (TSA) are true EXCEPT:
Income derived from the TSA is received income-tax free
Which of the following can be defined as a cause of a loss?
Peril
A hold-harmless clause is an example of risk __________
Transfer
Which of the following Life insurance policies combine term insurance with an investment element?
Universal Life
A life policy that contains a monthly mortality charge as well as self-directed investment choices is called a(n)
Variable universal life policy
A life policy with a death benefit and cash value that can fluctuate according to the performance of its underlying investment portfolio is referred to as:
Variable life
A __________ ___________ Life policy combines investment choices with a form of Term coverage
Variable Universal
