Ok

Question 1

premiums paid by Emp in biz life ins policy

Tax deductible by Emp
Tax deductible by employee
Never taxable to employee

Answer 1

Tax deductible by the employer

Question 2

Recs payments consisting of both principal and interest portions which parts are taxable as income

Principal
Interest
Both principal and interest

Answer 2

Interest

Question 3

Advantage of qualified plans of employers is

Tax deductible contributions
Tax free earnings
No lump sum payments

Answer 3

Tax deductible contributions

Question 4

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

Answer 4

Earnings accumulate tax deferred

Question 5

False re taxation of MEC modified endowment contacts

Accumulations are tax deferred
Withdrawals are not taxable
Policy loans are taxable distributions

Answer 5

Withdrawals are not taxable

Any distributions from MECs are taxable including withdrawals and policy loans

Question 6

If life ins policy develops faster cash faster than seven pay whole life contract

Accelerated benefit policy
Endowment
Non qualified annuity
Modified endowment act

Answer 6

Modified endowment act

Question 7

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

Answer 7

At distribution all amounts received by employee are tax free

Question 8

Overfunded life ins policy/failed 7 pay test

Answer 8

Once mec always mec

Question 9

Which re taxation of MEC is false

Accumulations are tax deferred
Withdrawals are not taxable
Loans are taxable distributions

Answer 9

Withdrawals are not taxable

Question 10

To claim currently insured status under ss a worker must have earned at least how many credits during last 13 quarters

4
6
10

Answer 10

6

Question 11

If life ins policy develops cash faster than seven pay whole life contract

Accelerated benefit
Endowment
Modified endowment contract

Answer 11

Modified endowment contract

Question 12

Any cash value life ins policy that develops cash value faster than a seven pay whole life contract is

Answer 12

MEC and loses benefits of standard life

Question 13

What is official name for social security program

Qualified pension plan
Social insurance program
Defined benefit
Old age survivors disability insurance

Answer 13

Old age survivors disability insurance

Question 14

Purpose of seven pay test

Determines if ins policy is MEC
Requires level premium payments for seven years
Guarantees minimum interest

Answer 14

Determines if policy is a MEC

Question 15

Which statement is FALSE on MEC

Accumulations tax deferred
Withdrawals not taxable
Policy loans are taxable distributions

Answer 15

Withdrawals are not taxable

Question 16

Eligibility requirement for all social security disability income benefits

Be disabled for at least 1 year
Have permanent kidney failure
Have attained fully insured status

Answer 16

Have attained full insured status contributing to social security for 40 quarters aka 10 years stains fully insured status

Question 17

Has modified endowment contact
Wants to withdraw money to pay medical bills

He will have to pay penalty if younger than 59 1/2
Will have to pay penalty regardless of age
Will not have to pay penalty regardless of age

Answer 17

Will pay penalty if younger than 59 1/2

Question 18

Social security was created to provide all of the following benefits except

Unemployment survivors disability

Answer 18

Unemployment

Question 19

Following benefits available under ss except

Death
Old age and retirement
Welfare

Answer 19

Welfare

Question 20

Number of credits required for fully insured status for social security disability benefits
4
10
40

Answer 20

40

Question 21

Has modified endowment contract and wants to withdraw money to pay medical bills