Oh Boy Flashcards

1
Q

Following are personal uses of life ins except

Survivor protection
Estate creation
Cash accumulation
Buy sell agreement

A

Buy sell agreement

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Life ins proceeds may be used to pay inheritance taxes and federal estate taxes so that it is not necessary to

A

Sell off assets

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

All biz uses of life ins except

Funding against company’s general financial loss
Compensating executives
Funding against financial loss caused by death of key employee
Funding business continuation agreements

A

Funding against company’s general financial loss

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Corporation is owner and beneficiary of key person life policy …if corporation collects policy benefit then

Benefit is recd as taxable income
Benefit is recd tax free
Benefit is subject to exlusionary rule
Irs has no jurisdicition

A

Benefit is recd tax free

Treated as reimbursement

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Purpose of key person insurance

Lessons risk of financial loss
Provide health ins to families of key emps
Insure retirement mr benefits are available to all key employees

A

Lessen the risk of financial loss because the death of a key employee

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Key person may be used as term or permanent life with

A

Whole life and universal life being used most often

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Not considered example of biz use of life ins

Workers comp
Buy sell funding
Exec bonuses
Key person

A

Workers compensation

Payable benefit when worker injured regardless of fault or negligence

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Eh person ins policy can pay for

Loss of personal income
Workers comp
Hospital bills of key Emp
Costs of training replacement

A

Costs of training a replacement

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

All true of key person ins except

Emp is owner Payor and beneficiary of policy
Key Emp is insured
Plan is funded by perm ins only
No limitation on number of key Emp plans in force at any one time

A

Plan is funded by permanent ins only

May be funded by ANY type of ins

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Corporation is owner beneficiary applicant premium payer of key person life policy. If corporation collects policy benefit then

Benefit is recd as taxable
Benefit is recd tax free
Benefit is subject to exclusionary rule
Irs has no jurisdiction

A

Tax free

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Which of following concerning taxation of premiums in key person life ins policy

Premiums are tax deductible as business expense
Taxable to employee
Not tax deductible as business expense

A

Premiums are not tax deductible as business expense

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Policy used to fund agreement that contractually establishes intent of someone to purchase biz upon insured biz owners death is

Buy sell agreement
Key person policy
Split dollar plan
Stock redemption plan

A

Buy sell agreement

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

All true except

Employer is owner Payor and beneficiary
Key employee is insured
Plan is funded by permanent ins
No limitation on number of key employee plans at one time

A

Plan is funded by permanent ins only

How well did you know this?
1
Not at all
2
3
4
5
Perfectly