WASHINGTON LIFE HEALTH INSURANCE 2026/2027
QUESTIONS AND SOLUTIONS RATED A+
✔✔Profit sharing pension plans - ✔✔Employees receive a potion of company profits.
Contributions vary at the companies discretion. Contributions must be "reoccurring and
substantial".
✔✔Defined benefit pension plans - ✔✔Guaranteed specific retirement benefit paid for
by employer. Formula determines how much is received by employee.
✔✔Defined contribution pension plans - ✔✔Employer contributes a specific amount
each year to the plan. Employee is responsible for choosing the investment from
choices offered by the retirement plan service. Must be funded regardless of company
profits.
✔✔Keogh (HR 10) plan - ✔✔Self-Employed person can contribute a specified amount
to a retirement fund. Contributions are tax deducible for the business.
✔✔Simplified Employee Pension Plan (SEP) - ✔✔Simpler to create and operate than a
Keogh plan.
✔✔Pay in/Accumulation phase - ✔✔Owner sends money to the insurance company
✔✔Pay out phase/ Distribution phase - ✔✔When the insurance company pays the
beneficiary
✔✔Non-forfeiture value - ✔✔the amount of the cash value account
that the Insurer would have to pay if the Annuity owner, during the pay-in phase, stops
making payments, decides to surrender the Annuity, or dies. Surrendering the Annuity
prior to age 59 ½ may result in taxes being due on the
growth plus a 10% penalty
✔✔Single premium annuity - ✔✔One time payment.
✔✔Level (Fixed) premium annunity - ✔✔Regular payments. Common way for a worker
to fund a retirement annuity.
✔✔Flexabile premium annunity - ✔✔Flexible premiums and the insurer has not agreed
to any set level of future benefits.
✔✔Immediate annuity - ✔✔Starts as soon as it is purchased. Only used with single
premium pay-ins.
✔✔Deferred Annuity - ✔✔Postponed payouts
, ✔✔Lump Sum annuity - ✔✔Lump sum payment. Tax deferred growth becomes taxable
when it leaves the annuity. IF before 59 1/2, 10% premature removal tax.
✔✔Annuity certain options - ✔✔Either the time period payments will be received or the
amount of each payment, to be decided by the annuitant.
✔✔Fixed Period Annuity Certain - ✔✔The Annuity is paid out of a specified period of
time
✔✔Fixed amount annuity certain - ✔✔The annuity pays a specified amount until the
funds are exhausted
✔✔Life annuity - ✔✔Payments every month as long as the beneficiary is alive. The
insurer determines the monthly payment based on a number of factors.
✔✔Straight life annuity - ✔✔Pays a set amount until the annuitant dies. This is the
default annuity.
✔✔Life annuity with period certain - ✔✔Same as life annuity, but payments will continue
to be paid even if annuitant dies for a specified period of time
✔✔Life annuity with amount certain (Refund life annuity) - ✔✔Payments for the whole
life of the annuitant. If annuitant dies early, the remaining balance of the amount will be
given to the annuitants estate.
✔✔Joint and survivor life annuity pay out - ✔✔Payments continue until both annuitants
have dies.
✔✔Fixed Dollar (Conventional) annuity - ✔✔Guaranteed rate of return.
✔✔Variable annuities - ✔✔Owner can chose the investment option. Account is valued
in terms of shares or annuity units. When payout begins, the company calculates how
many annuity unites it will pay the person each month. The units will remain constant,
but the value of the units themselves will fluctuate. The annuitant can chance to a fixed
annuity during the payout period.
✔✔Equity indexed annuities - ✔✔Ties the growth of the cash value to an economic
index. Pays the greater of a guaranteed minimum rate of return or a rate of return based
on a particular economic index.
✔✔Non-Qualified annuity using after-tax dollars - ✔✔Earnings in this annuity
accumulate tax deferred.
QUESTIONS AND SOLUTIONS RATED A+
✔✔Profit sharing pension plans - ✔✔Employees receive a potion of company profits.
Contributions vary at the companies discretion. Contributions must be "reoccurring and
substantial".
✔✔Defined benefit pension plans - ✔✔Guaranteed specific retirement benefit paid for
by employer. Formula determines how much is received by employee.
✔✔Defined contribution pension plans - ✔✔Employer contributes a specific amount
each year to the plan. Employee is responsible for choosing the investment from
choices offered by the retirement plan service. Must be funded regardless of company
profits.
✔✔Keogh (HR 10) plan - ✔✔Self-Employed person can contribute a specified amount
to a retirement fund. Contributions are tax deducible for the business.
✔✔Simplified Employee Pension Plan (SEP) - ✔✔Simpler to create and operate than a
Keogh plan.
✔✔Pay in/Accumulation phase - ✔✔Owner sends money to the insurance company
✔✔Pay out phase/ Distribution phase - ✔✔When the insurance company pays the
beneficiary
✔✔Non-forfeiture value - ✔✔the amount of the cash value account
that the Insurer would have to pay if the Annuity owner, during the pay-in phase, stops
making payments, decides to surrender the Annuity, or dies. Surrendering the Annuity
prior to age 59 ½ may result in taxes being due on the
growth plus a 10% penalty
✔✔Single premium annuity - ✔✔One time payment.
✔✔Level (Fixed) premium annunity - ✔✔Regular payments. Common way for a worker
to fund a retirement annuity.
✔✔Flexabile premium annunity - ✔✔Flexible premiums and the insurer has not agreed
to any set level of future benefits.
✔✔Immediate annuity - ✔✔Starts as soon as it is purchased. Only used with single
premium pay-ins.
✔✔Deferred Annuity - ✔✔Postponed payouts
, ✔✔Lump Sum annuity - ✔✔Lump sum payment. Tax deferred growth becomes taxable
when it leaves the annuity. IF before 59 1/2, 10% premature removal tax.
✔✔Annuity certain options - ✔✔Either the time period payments will be received or the
amount of each payment, to be decided by the annuitant.
✔✔Fixed Period Annuity Certain - ✔✔The Annuity is paid out of a specified period of
time
✔✔Fixed amount annuity certain - ✔✔The annuity pays a specified amount until the
funds are exhausted
✔✔Life annuity - ✔✔Payments every month as long as the beneficiary is alive. The
insurer determines the monthly payment based on a number of factors.
✔✔Straight life annuity - ✔✔Pays a set amount until the annuitant dies. This is the
default annuity.
✔✔Life annuity with period certain - ✔✔Same as life annuity, but payments will continue
to be paid even if annuitant dies for a specified period of time
✔✔Life annuity with amount certain (Refund life annuity) - ✔✔Payments for the whole
life of the annuitant. If annuitant dies early, the remaining balance of the amount will be
given to the annuitants estate.
✔✔Joint and survivor life annuity pay out - ✔✔Payments continue until both annuitants
have dies.
✔✔Fixed Dollar (Conventional) annuity - ✔✔Guaranteed rate of return.
✔✔Variable annuities - ✔✔Owner can chose the investment option. Account is valued
in terms of shares or annuity units. When payout begins, the company calculates how
many annuity unites it will pay the person each month. The units will remain constant,
but the value of the units themselves will fluctuate. The annuitant can chance to a fixed
annuity during the payout period.
✔✔Equity indexed annuities - ✔✔Ties the growth of the cash value to an economic
index. Pays the greater of a guaranteed minimum rate of return or a rate of return based
on a particular economic index.
✔✔Non-Qualified annuity using after-tax dollars - ✔✔Earnings in this annuity
accumulate tax deferred.
