Insurance

Question 1

VERBA Voluntary Employees’ beneficiary association

Answer 1

No deferred comp in VERBA

Question 2

FSA Keys

Answer 2

Used for life, health, disability, NO LTC
Reductions not subject to FICA
use it or lose it - 2 1/2 month grace period, or leave $610 (not both)
limit is $3,050

Question 3

Dependent Care FSA

Answer 3

$5,000 per year
no grace period use it or lose it

not eligible:
tuition and fees
expenses for children over 13
overnight camps
late payment fees
advanced payments
fieldtrips, clothing and food
transportation to dependent care provider

Question 4

group life insurance

Answer 4

= DB - 50,000
= table rate * includable amount * 12 months
= gets added to W-2

Question 5

dividend options

Answer 5

C ash
R educed premium due
A ccumulate with interest
P aid - up additions
O ne year term / 5th dividend

Question 6

nonforfeiture options
(options when you surrender a policy)

Answer 6

CASH
REDUCED PAID UP insurance
Extended term

Question 7

settlement options
(when the insured dies)

Answer 7

cash
interest only
fixed period
fixed installment
4 life income options

Question 8

taxation of whole life

Answer 8

cash value ABOVE cost basis @ time of surrender taxed at ordinary income