Life Insurance and Health Insurance Exam with 100% Verified Questions and Answers/ Grade A+/ Latest Update (1200+Q&As)
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Life Insurance and Health Insurance
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Life Insurance And Health Insurance
Life Insurance and Health Insurance Exam with 100% Verified Questions and Answers/ Grade A+/ Latest Update (1200+Q&As)/Life Insurance and Health Insurance Exam with 100% Verified Questions and Answers/ Grade A+/ Latest Update (1200+Q&As)/Life Insurance and Health Insurance Exam with 100% Verified Q...
Life Insurance and Health Insurance
Section 529 Plans - correct answer - state provided
- can be funded by after tax dollars
- can pay prepaid tuition
- All earnings exempt from federal taxes
- If withdrawn for unqualified withdrawl, 10% penalty
Roth IRA - correct answer private retirement plan that taxes income before it is
saved, but which does not tax interest on that income when funds are used upon
retirement
Distributions don't have to start before 70.5
401(k) plan - correct answer Elective deferral plan that allows employee to
reduce compensation by a stated percentage on a tax deductible/ tax differed
basis; often the employer matches the employee contributions
Simplified Employee Pension (SEP) - correct answer A qualified plan in which a
smaller employer contributes specified amounts directly into IRA accounts on
behalf of eligible employees
403(b) plan - correct answer An elective deferral plan for employees of
organizations such as school systems, churches, and hospitals
Keogh Plan - correct answer Retirement plan for self-employed individual and
their qualified employees
Rollover - correct answer Tax free withdrawal of cash or other assets from one
retirement program and its reinvestment in another program. It is not considered
income and it is not taxable until a later withdrawal. Has to be completed in 60
days
Transfer - correct answer When amounts of a qualified plan are transferred to
another qualified plan
Employee Retirement Income Security Act (ERISA) - correct answer Federal law
that increased the responsibility of pension plan trustees to protect retirees,
established certain rights related to vesting and portability, and created the
Pension Benefit Guarantee Corporation
,Life Insurance and Health Insurance
profit-sharing plan - correct answer a benefit whereby employees may share in
the profits of the business
Catch-up Contributions - correct answer -for those aged 50 or older
-additional $1,000 annually
**Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) -
established the catch up provisions**
Rollover time frame - correct answer 60 days
Keogh Plan - correct answer A federally-approved, tax-deferred savings program
for self-employed people, allowing them to set money aside for their retirement.
Annuity Period - correct answer the payout period of an annuity
Flexible Premium Annuity - correct answer allows the owner to vary the premium
payments
Deferred Annuity - correct answer An annuity that starts sometime in the future.
Variable Annuity - correct answer Annuity that has a varying rate of return based
on the mutual funds in which one has invested
Gramm-Leach-Bliley Act - correct answer requires financial institutions to ensure
the security and confidentiality of customer data
Certificate of Insurance (COI) - correct answer proof that the insured has
insurance
Market conduct - correct answer refers to the marketing practices of insurers
and agents that involve interaction with insureds, claimants, or consumers
expense loading - correct answer the amount needed to pay all expenses,
including commissions, general administrative expenses, state premium taxes,
acquisition expenses, and an allowance for contingencies and profit
Straight Life Annuity - correct answer The payout option that will guarantee an
annuity payment for the remainder of an individual's life. This option typically
provides the largest monthly payment.
,Life Insurance and Health Insurance
Refund Life Annuity - correct answer Provides annuity payments for the
annuitant's lifetime with the guarantee that in no event will total income be less
than the purchase price of the contract. If the annuitant dies before receiving this
amount, the difference is paid to a named beneficiary either as a cash refund or in
installments.
convertible term policy - correct answer
Aleatory Contract - correct answer a contract where the values exchanged may
not be equal but depend on an uncertain event
Insurance Dividends - correct answer Considered to be a return of overpaid
premiums and is not taxable. You can get the dividend in the form of CRAPPO
- Cash
- reduction of premium
- allow the dividends to accumulate at interest (the money earned on the
returned dividend is taxable as ordinary income
- Paid up permament addition - you can purchase additional whole life policy and
the price will change depending on dividend and age
-paid up option - pay up policy earlier than expected
- one year term - use dividends to purchase additional term insurance for 1 year
(after 1 year, the term expires)
insurance benefit - correct answer Advantage, privilege, right, or financial
reimbursement
Insurance Considerations - correct answer The easiest way to protect yourself
and your organization from the legal liability and financial loss associated with
environmental safety risks is through insurance. Coverage by insurance allows the
facility to transfer the potentially devastating financial risk of a future loss for the
cost certainty of a monthly or yearly payment (i.e., premium).
Adverse Selection - correct answer A high-risk person benefits more from
insurance, so is more likely to purchase it.
, Life Insurance and Health Insurance
qualified retirement plan - correct answer A retirement savings plan approved by
the Internal Revenue Service that provides individuals with a tax benefit
Unilateral Contract - correct answer promise in exchange for an act
Elements of a Contract - correct answer offer, acceptance, consideration
Section 1035 (Policy Exchanges) - correct answer Due to the fact that life
insurance, annuities and endowments are all similar in nature (though they have
their differences), the IRS, under certain circumstances, allows for the exchange
of one policy for another without taxation to the individual, as long as funds are
not distributed to the individual in the process.
limited pay life insurance - correct answer A form of whole life insurance
characterized by premium payments only being made for a specified or limited
number of years.
annuity - correct answer payment received every year
Mutual Insurance Company - correct answer A type of insurance company
owned by its policyholders.
Whole Life Insurance Policy - correct answer the cash value is greatest at the end
of the policy period, and the insurance protection is greatest at the start of the
policy
class beneficiary - correct answer a member of a group, e.g., children of the
insured
Tertiary Beneficiary - correct answer The third in line to receive the benefits of a
life insurance policy.
State Guaranty Association - correct answer protect policy owners in the event of
any insurance company going out of business, becoming insolvent, or the in
ability to pay claims
What effects the amount of the person premium? - correct answer If it does not
effect their life span it does not effect their premium
Credit Life Insurance - correct answer A special type of coverage written to pay
off the balance of a loan in the event of the death of the debtor.
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