Help Flashcards

1
Q

Group life ins is a single policy to provide to members of a group
Which of following is CORRECT
Each member covered receives a policy
Coverage cannot be converted when individual leaves group
Premiums are determined by age occupational and individual
100 participation of members is required in noncontributory plans

A

100 ppt is required in noncontributory plans

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2
Q

Incorrect regarding noncontributory group plan

Require 100 employee ppt
Emp pays 100 of premiums
Ends rec individual policies
Help to reduce adverse selection against the insurer

A

INCORRECT: Emp rec individual policies

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3
Q

He quits and converts group policy to individual policy premium will be based on his

A

Attained age

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4
Q

Emp insured under her employer’s group life plan
If she terminates her group coverage which is INCORRECT

Insured may convert coverage to individual policy within 31 days
Premium for individual coverage will be based upon attained age
May choose to convert to term or permanent individual coverage

A

May choose to convert to term or permanent individual coverage

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5
Q

When group coverage is converted to individual policy insurer will determine

A

Type of ins usually permanent ins

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6
Q

Emp quits job on may 15 and doesnt convert his group life to individual for 2 weeks; dies in freak accident on June 1. Which best describes

Insurer will pay death benefit from group policy to beneficiary
Insurer will pay a reduced death benefit to beneficiary
Insurer will pay death benefit minus one month’s premium
Insurer will pay nothing bc employee has terminated group ins and hasn’t started individual one

A

Insurer will pay full death benefit from group policy to beneficiary

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7
Q

Qualified retirement plans

A

Have tax advantages

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8
Q

Require no govt approval and used as means for employer to discriminate in favor of valuable employee with regard to Emp benefits

A

Non qualified retirement plans

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9
Q

Individual annuities and deferred compensation plans for highly paid executives split dollar ins arrangements and section 162 exec bonus plans

A

Non qualified plans

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10
Q

Currently tax deductible
Approved by irs
Cannot discriminate
Earnings grow tax deferred
Withdrawals are taxed

A

Qualified retirement plan

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11
Q

Not currently tax deductible
Does not need irs approval
Can discriminate
Grow tax deferred
Excess over cost basis is taxed

A

Non qualified retirement

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12
Q

All true regarding tax qualified annuities except

Must be approved by irs
Withdrawals are taxed
Empr contributions are not tax deductible
Annuity earnings are tax deferred

A

Emp contributions are not tax deductible

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13
Q

Emp contributions made to a qualified plan are

After tax
Taxed annually as salary
Subject to vesting requirements
May discriminate in favor of highly paid

A

Subject to vesting requirements

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14
Q

Which does not require owner to start taking distributions at age 73

Non qualified ira
Standard ira
Traditional ira
Both ira

A

Roth IRA

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15
Q

Retirement plan is qualified

Noncancellable
Approved by irs
Has penalty for early withdrawal
Accepts after tax contributions

A

Approved by irs

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16
Q

True of qualified plan

Does not need to have vesting schedule
May discriminate in favor of highly paid employees
May allow unlimited contributions
Has tax benefit for both employer and employee

A

Has tax benefit for both Emp and employee

17
Q

Not true regarding non qualified retirement plan

Can discriminate in benefits and selecting participants
Earnings grow tax deferred
Needs irs approval
Contributions are not currently tax deductible

A

Needs irs approval

18
Q

Does not require owner to start taking distributions at age 73

Non qualified ira
Standard ira
Traditional ira
Roth IRA

A

Roth IRA

(Can continue regardless of acct owners age and in contrast with traditional ira distributions dont have to begin at specified age