From The Classes Flashcards
Requisites for an insurable risk are…
CHAD
Must note be Catastrophic for the insurer
Large number of similar Homogenous exposure units
Losses must be Accidental from an insured’s view
Losses must be Determinable (measurable)
Coinsurance Calculation
Amount of Coverage Purchased / Coinsurance x Loss - Deductible
(remember the coinsurance goes against the TOTAL REPLACEMENT value)
Typically if you transfer a life insurance policy, it’s taxable to the transferee to the extent that proceeds exceed basis. EXCEPTIONS TO THIS ARE:
Transferred to the
- insured
- business partner of the insured
- partnership of the insured
- corporation in which insured is a shareholder
- that results in a carryover basis from transferor to transferee
Inclusion / Exclusion ratio for non-qualified annuity payout
1) Monthly payment x 12 months x life expectancy = Total Payments
2) Basis / total payments = exclusion ratio
* This tells you how much of the basis you’re getting back tax free.
Taxation of Annuities (Pre & Post 1982)
Prior to 1982 = FIFO
After 1982 = LIFO
COBRA
- Must be offered if employer has 20 or more full time employees.
Coverage:
- 18 months for reduction in hours or normal termination
- 36 months for death, divorce, medicare eligibility
- 36 months for loss of dependency status by children of employee
- Up to 29 months if employee meets SS definition of disabled
Employees have 60 days to make a COBRA election
**Does not have to be offered if employer has less than 20 full time employees
Basic Named Perils
THE FRAWLS VVV
Fire Lightning Windstorm Hail Riot Aircraft Vehicles Smoke Vandalism Explosion Theft Volcano
Broad Named Perils
Basic Named Perils + FAS FWD
Falling objects Weight of ice, snow, sleet Accidental overflow of water (not flood) Sudden bursting of appliances Freezing of system of appliance Damage from electrical current
For a married taxpayer who is a participant in a qualified plan the phaseout range for 2020 is…
$104,000 – $124,000
The safe harbor provision in a 401(k) plan allows for what?
Immediate and full vesting in the first year of participation.
529 plans can now be used to pay for up to $______ per year for tuition at primary schools and $______ amount for qualified expenses at secondary schools.
$10,000
Unlimited
Social Security Tax Amounts
OASDI (up to $137,700 wage base in 2020)
- 6.2% employer
- 6.2% employee
Medicare (unlimited wage base)
- 1.45% to employer and employee
Additional Medicare tax of 0.9%
- On income in excess of $200,000 if single
- On income in excess of $250,000 if MFJ
Social Security Benefit Reduction & Increase
If retired before FRA:
- Benefit reduced by 5/9 for each MONTH for first 3 years
- Benefit reduced by 5/12 for each MONTH beyond 3 years
- QUICK TIP: If taking SS @62 and FRA is @70, it’s a 30% benefit reduction
If retired after FRA:
- Benefit increased by 8% each year
- Benefit increased by 2/3 of 1% each month
Social Security Beneficiaries
*Cannot collect more than one benefit.
Divorced Spouse of a covered worker:
- If age 62 AND
- Married to the worker for AT LEAST 10 YEARS and
- Did NOT re-marry
*If their benefit is higher than their ex-spouse, they will take their own personal benefit.
Medicare Part A
Covers where you’re AT.
- Hospital, skilled nursing, home health, hospice
- Does NOT cover custodial services (LTC still necessary)
Deductible is $1,408 per benefit period, 1st 60 days
Coinsurance:
- Days 21-100 = 176
- Days 61-90 = $352
- Days 91-150 = $704 (lifetime reserve days - total of 60)
Medicare Part B
DOES NOT COVER:
- Dental care, dentures
- Cosmetic surgery
- Hearing aids
- eye exams
- Initial preventative visit and annual wellness visits
