Taxes, Retirement, and Other Insurance Concepts Flashcards

1
Q

principle under which it is assumed that the funds paid into the policy first will be paid out firs

A

FIFO

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2
Q

principle applied to asset management in life insurance products, wnder which it is assumed that the funds paid into the policy last will be paid out first

A

LIFO

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3
Q

maturity date

A

Policy endowment

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4
Q

the right of a participant in a retirement plan to retain part or all of the benefits

A

vesting

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5
Q

legal term used to identify an individual or entity that is not an insured under the contract, but that has legally enforceable right under it

A

third party ownership

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6
Q

most third party contracts are written fro

A

business or minors

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7
Q

allow someone living with a life threatening condition to sell thier existing life insurance policy and use the proceeds when they are most needed, before their death

A

viactical settlements

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8
Q

in viactical settlements, the insured is known as

A

viators

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9
Q

in viactical settlements, a ____ is a person other than the viator that enters the contract

A

provider

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10
Q

in a viactical settlement, who represents the providers?

A

producers

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11
Q

in a viactical settlement, who represents the insureds?

A

brokers

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12
Q

refers to any financial transaction in which the owner of a life insurance policy sells a life insurance policy to a third party for some form of compensation, usually cash

A

life settlement

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13
Q

refers to any activity relating to the solicitation and sale of a life settlement contract to a third party who has no insurable interest in the insured

A

business of life settlement

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14
Q

refers to the owner of the life insurance policy who seeks to enter into a life settlement contract

A

owner

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15
Q

establishes the terms under which the life settlement provider will pay compensation to the policyowner, in return for the assignment, transfer, sale, or release of any portion of the death benefit, policy ownership, beneficial interest, or interest in a trust

A

life settlement contract

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16
Q

a person who, for compensation, solicits and negotiates a life settlement contract

A

life settlement broker

17
Q

a person (other than the owner) who enters into a life settlement contract with the owner

A

life settlement provider

18
Q

issued to the sponsoring organization, and covers the lives of more than one individual member of that group

A

group life insurance

19
Q

Group life insurance is usually written as what type of insurance?

A

annually renewable term

20
Q

The cost of coverage in group life insurance is based on what?

A

the ratio of men and women in the group

21
Q

two features that distinguish group insurance from individual insurance are

A

no need for evidence of insurability, insureds under the plan do not receive a policy because they are not the owner

22
Q

under group insurance, what do the participants recieve instead of a policy?

A

certificate of insurance

23
Q

under group insurance, what does the sponsor of the group receive?

A

master policy/contract

24
Q

characteristics needed for group insurance

A

purpose, size, turnover rate, financial strength

25
Q

if an employee terminates membership in the insured group, the employee has the right to convert to an individual policy without proving insurability at a standard rate, based on the individuals attained age

A

Conversion privelege

26
Q

conversionn privelege can be used to convert to every type except

A

term insurance

27
Q

How long does a terminating employee have to take the conversio policy

A

31 days

28
Q

if a master group contract is terminated, what is allowed?

A

Every individual who has been on th eplan fro more than 5 years can convert to individual permanent insurance of the same coverage

29
Q

when an employer pays all of the premiums

A

noncontributory plan

30
Q

under a noncontributory plan, an insurer will require ..

A

100% of eligible employees be included in a plan

31
Q

When the premiums of group insurance are shared between the employer and employees

A

contributory plan

32
Q

under a contributory plan, am dinsurer will require..

A

75% of eligible employees be included in the plan

33
Q

approved by the IRS and gives both the employer and employee benefits such as deductable contributions and tax-deferred growth

A

qualified retirement plan

34
Q

not subject to the requirements regarding participation, discrimination, and vesting found in qualified plans

A

nonqualified

35
Q

allows individuals to make tax deductable contributions until the age of 70 1/2.

A

individual retirement account (IRA)

36
Q

a form of an individual retirement account funded with after-tax contributions

A

Roth IRA