Ok Flashcards
premiums paid by Emp in biz life ins policy
Tax deductible by Emp
Tax deductible by employee
Never taxable to employee
Tax deductible by the employer
Recs payments consisting of both principal and interest portions which parts are taxable as income
Principal
Interest
Both principal and interest
Interest
Advantage of qualified plans of employers is
Tax deductible contributions
Tax free earnings
No lump sum payments
Tax deductible contributions
Best advantage of qualified retirement plan
Contributions are tax deductible as long as Emp earnings are considered taxable income
Contributions are taxed as income to employee
Earnings accumulate tax deferred
Earnings accumulate tax deferred
False re taxation of MEC modified endowment contacts
Accumulations are tax deferred
Withdrawals are not taxable
Policy loans are taxable distributions
Withdrawals are not taxable
Any distributions from MECs are taxable including withdrawals and policy loans
If life ins policy develops faster cash faster than seven pay whole life contract
Accelerated benefit policy
Endowment
Non qualified annuity
Modified endowment act
Modified endowment act
All true of federal tax advantages of qualified plan EXCEPT
At distribution all amounts received by employee are tax free
Funds accumulate on tax deferred basis
Emp and employer contributions are not counted as income to the employee for income tax purposes
At distribution all amounts received by employee are tax free
Overfunded life ins policy/failed 7 pay test
Once mec always mec
Which re taxation of MEC is false
Accumulations are tax deferred
Withdrawals are not taxable
Loans are taxable distributions
Withdrawals are not taxable
To claim currently insured status under ss a worker must have earned at least how many credits during last 13 quarters
4
6
10
6
If life ins policy develops cash faster than seven pay whole life contract
Accelerated benefit
Endowment
Modified endowment contract
Modified endowment contract
Any cash value life ins policy that develops cash value faster than a seven pay whole life contract is
MEC and loses benefits of standard life
What is official name for social security program
Qualified pension plan
Social insurance program
Defined benefit
Old age survivors disability insurance
Old age survivors disability insurance
Purpose of seven pay test
Determines if ins policy is MEC
Requires level premium payments for seven years
Guarantees minimum interest
Determines if policy is a MEC
Which statement is FALSE on MEC
Accumulations tax deferred
Withdrawals not taxable
Policy loans are taxable distributions
Withdrawals are not taxable