Insurance Flashcards
Rev. Insurance 1-2 A company can neither purchase nor own a life insurance policy in which of the following circumstances? Insuring the life of a key employee, funding a stock purchase agreement, funding a non qualified deferred comp, funding a cross purchase buy sell agreement?
Funding a cross purchase buy sell agreement.
The employer has no insurance interest in a cross a cross purchase.
Rev insurance What is not covered under Kathy’s homeowners policy?
Rev Ins An employee, while at work attacks a customer. The owner of the business will be held liable under which of the following? Strict, absolute, general liability or intentional tort?
General liability. Think of absolute liability as wild animals or Workmans comp…
Rev. In’s What would a business owner purchase to package together real property, contents and general liability protection?
BOP Business owners policy
Rev Ins How many employees do you need to have to have Cobra come into play?
20 for atleast half of the prior year
Rev Ins an employer has 15 full time and 10 part time employees. However only 9 are covered under the company health plan. Will the 9 employees be covered by cobra?
No the 10 part timers have to make up for the 5 needed full time employees. Unlikely that it will make the 20 requirement with only 10 part timers.
Rev Ins if an employee of a company with 28 employees voluntarily terminated but wasn’t taking the company health insurance. Would he qualify for cobra?
No, must be participating
Rev Ins Does cobra cover group dental and vision? Disability?
Yes, no on disability
Rev. Ins Client was laid off. Covered under company health plan. What are he and his family’s cobra options?
Can continue coverage for 18 months
Rev Ins An individual in a HSA becomes eligible for Medicare. Does she become ineligible as a participant?
Mere eligibility for Medicare doesn’t preclude HSA contributions. An individual once enrolled in Medicare Part A and B may not contribute to a HSA
Rev Ins Are insurance premiums qualified medical expenses?
Only certain insurance premiums such as COBRA and qualified long term care insurance are qualified medical expenses.
Rev Ins. A trial attorney lost his voice over a year ago. Now works as a law researcher at the firm. Mad cuz his disability policy isn’t paying out. Why?
Loss of speech could be a presumptive disability. Could be a loss of income policy. Policy could be a modified any occ policy.
Rev Ins which is more expensive to have on a policy. Non can or guaranteed renewable? Why
Non can is more expensive. Guaranteed renewable can increase the premium on the class of insureds…
Rev ins Lori age 49 needs life insurance for 25 years, then wants to borrow or withdraw the cash value from the policy over her retirement years , keeping the policy in force. Which of the following best suits her needs? Endowment, VUL, Single premium variable life, universal life
Variable Life.
Rev ins Martha borrowed substantially against her whole life policy. She is concerned about the reduced benefit due to the loan. Which dividend option should she elect? Paid up, extended term, reduced paid up, 5th dividend
5th dividend. Extra one year term
Rev ins Howie and frank enter into a cross purchase buy sell agreement for both life and disability. Current basis is $1k. Company valued at 1 million. If Howie becomes totally disabled and dies. Who gets paid and by who? Tax consequences and cost basis?
Frank receives 500k income tax free. Franks basis would be 501k if he sold HF for 1 million. Howie would receive 500k in cash not dividends from Frank
Rev Ins How long of a waiting period does SIS have?
5 months, but a disabled person generally must wait 12 months because social security won’t pay if disability is less than 12 months.
