I Kinda Know It Flashcards
What will medicare pay for in terms of LTCi? What are the timelines and general co-pays for a patient?
Skilled nursing care that leads to recovery
0-20 days: $0 patient co-pay
21-100 days: some patient co-pay
101+ days: patient pays all
Which of the following is NOT one of the three basic components that establish the premium and define the payment of benefits under a disability income insurance policy?
The cause of the disability (sickness or injury)
The elimination period
The benefit period
The amount of the monthly indemnity
The cause of the disability (sickness or injury)
The purpose of a ________________ benefit in a disability income insurance policy is to encourage insureds to participate in a program to help them recover or retrain to be able to return to work without fear of having benefits reduced.
recovery
development
residual
rehabilitation
rehabilitation
When does the Social Security Supplement (SIS) benefit kick in?
When disability is not being paid
Choose the basic components that establish the premium and define the payment of benefits under LTCi policies.
I. The elimination period
II. The benefit period
III. The amount of daily benefit
IV. The face value amount
I, II, III
I, II, III, and IV
I and III
II and IV
I, II, III
I. The elimination period
II. The benefit period
III. The amount of daily benefit
Identify the level of LTC service that has the following characteristics:
Periodic care with activities of daily living (ADLs)
As-needed basis
Provided by non-licensed caregivers
Skilled Nursing Care
Intermediate Care
Custodial Care
Adult Day Health Care
Custodial care
What retirement account can fund an HSA?
A direct transfer from an IRA to HSA, once
What is the level of market efficiency, in which only previous security prices and volume data are reflected in current security prices, called?
A strong form efficient market
A semi-strong form efficient market
A weak form efficient market
A perfectly efficient market
A weak form efficient market
What are the three general levels of LTC insurance?
Skilled nursing care: highest level of care - usually access to a RN or Dr 24-7
Intermediate care: less intensive nursing or rehabilitative care
Custodial care: care that is not medical in nature, i.e. assistance with activities of daily living
What is assisted living care?
Pay a monthly fee to live in a facility with a private room/apartment, access to meals and assistance with daily living
What is a hybrid life/LTC policy?
This combines whole life with LTC so that if LTC is required, it draws from the death benefits of the life policy. If not, then the entire death benefit is given tax free. The downside is if LTC exahusts the death benefit and it is still needed. Also, if insurance isn’t needed and neither is LTC, it could be too much insurance.
What is an annuity/LTC hybrid policy?
An annuity, typically funded by rollover or 1035 exchange, pays for LTC for a specified number of years.
What is the Program of All-Inclusive Care for the Elderly (PACE)?
a Medicare and Medicaid alternative to nursing homes which sends nursing assistance to the home. Must be in an area that provides that service
What are Partnership Qualified LTC Policies?
These are policies that allow the insured to exhaust the LTC insurance benefits and qualify for Medicaid without spending down their assets to Medicaid requirements. The partnership gives the insured credit (read “protects” ) for the face value of the LTC policy.
What is the social insurance supplement (SIS) rider?
This rider works with disability to reduce the benefit by the social insurance amount for a total of what the policy would have provided which also reduces the premium
What are the various renewal levels of long term disability insurance?
Noncancellable: best - company cannot raise premiums or cancel policy
Guaranteed renewable - company cannot cancel policy, but can raise premiums as a class
Conditionally renewable - allows company to cancel policy if insured does not meet certain conditions. They can also raise premiums
Non-guaranteed continuation - worst. Company and cancel policy at any time and/or raise premiums
Name the general topics of the following acts:
Securities Act 1933
Securities Act 1934
Investment Advisors Act 1940
McCarran Ferguson Act 1945
Security Protection Act 1970
Gramm-Leach Bliley 1999
Sarbanes-Oxley 2002
Dodd Frank 2010
Securities Act 1933 - est primary market
Securities Act 1934 - est secondary market & SEC
Investment Advisors Act 1940 - requires investor registration
McCarran Ferguson Act 1945 - insurance regulated by state
Security Protection Act 1970 - est securities investor protection corp
Gramm-Leach Bliley 1999 - repealed glass-steagal; bank could combine services
Sarbanes-Oxley 2002 - toughens accountability of financial institutions, recast powers of SEC
Dodd Frank 2010 - created consumer financial protection bureau
For an Original Issue Discount (OID) to be zero on a $250,000, 15-year, zero-coupon corporate bond, the purchase price must be greater than _____________.
$240,625
$62,500
$187,500
$231,250
$240,625
To find the purchase price at which an OID would be zero, the following formula is used to determine the amount of the maximum discount:
(0.0025 x face value of the bond x bond term
Which of the following statements is NOT correct regarding governmental Section 457(b) plans?
-A Section 457(b) rollover distribution that is not a direct transfer is subject to mandatory 20% federal income tax withholding.
-A Section 457(b) rollover distribution may be rolled over to an IRA.
-A Section 457(b) rollover distribution may only be rolled over to another governmental Section 457(b) plan.
-A Section 457(b) rollover distribution may be rolled over to a qualified plan.
-A Section 457(b) rollover distribution may only be rolled over to another governmental Section 457(b) plan.
Each of the following statements is correct regarding a SIMPLE IRA EXCEPT:
-An eligible employer may have no more than 100 employees.
-Employee deferrals into a SIMPLE IRA are aggregated with qualified plan deferrals in applying maximum annual limits.
-An employer may exclude from SIMPLE IRA participation employees who have not earned at least $5,000 from the employer in any two preceding years, and are reasonably expected to earn at least $5,000 in the current year.
-A distribution from a SIMPLE IRA within the first two years of participation may be subject to a 10% penalty.
-A distribution from a SIMPLE IRA within the first two years of participation may be subject to a 10% penalty.
_____________ deals with management of the ward’s property and personal affairs.
Plenary guardianship
Guardianship
Conservatorship
A ward
Plenary guardianship - assumes the person is incapacitated
In addition to all DC plan characteristics, what are Traditional PS plan characteristics?
Flexible contributions (3 of last 5)
ER profit not required for contributions
Typically allows hardship withdrawals
May invest 100% stock
Not subject to QJSA
Age-weighted plans can skew contributions
In addition to all DC plan characteristics, what are 401(k) plan characteristics?
401(k) is a provision added to PS, SBP or ESOPs
ER not required to contribute
Often offers loans or hardship withdrawals
Can be 100% invested in company stock
EE must be given 3 alternative investments
EE subject to ADP test
ER subject to ACP test
In addition to all DC plan characteristics, what are Money Purchase plan characteristics?
Mandatory ER contributions (pension)
May invest in no more than 10% company stock
No in-service withdrawals
Subject to QJSA