Colorado Life & Health Insurance
Exam | Guide with Questions and
Verified Answers | 100% Correct
(Latest )
Question:
Types of Business Insurance Needs
Answer:
-Key Employee Life Insurance
-Partnership Life Insurance
-Split Dollar Life Insurance
,Question:
Key Employee Life Insurance
Answer:
-Benefits company not person
-Business is beneficiary
-Premiums paid are not tax deductible
-Proceeds paid are not taxable
-In the event that the key employee no longer works for the company, yet
premiums are still paid, and they die, policy proceeds would go to company--
TEST
Question:
Partnership Life Insurance
Answer:
-Requires buy-sell agreement drafter by lawyer
-Each partner buys policy on the life of the other
-If partner dies, policy pays proceeds to the surviving partner
-Sometimes called a cross purchase buy-sell agreement
-If there are 3 partners a total of 6 policies would have to be sold
,Question:
Social Security Benefits
Answer:
-Small death benefit-only $255
-5 month waiting period
-Has survivors' benefits
-Benefits indexed for inflation
-Some benefits are based upon the Primary Insurance Amount (PIA)- The
amount a person would receive if they elect to begin receiving retirement
benefits at normal retirement age
Question:
Tax Treatment of Individual Life Insurance
Answer:
-Premiums are not tax deductible
-Proceeds are included in the value of the deceased's estate
Question:
Tax Treatment of Group Life Insurance
Answer:
-Tax deductible as business expense
, Question:
Tax Treatment of Modified Endowment Contracts (MEC)
Answer:
-Can't make profit for first 7 years
-Requires company to have a certain amount of risk
-Lose favored tax treatment
-If cash value exceeds the sum of all premiums paid; failed the 7-pay test
Question:
Types Disability Income Insurance
Answer:
-Individual Disability Income Policy
-Business Overhead Expense Policy (BOE)
-Business Disability Buyout Policy
-Group Disability Income Policy
-Key Employee/Partner Disability Policies
Exam | Guide with Questions and
Verified Answers | 100% Correct
(Latest )
Question:
Types of Business Insurance Needs
Answer:
-Key Employee Life Insurance
-Partnership Life Insurance
-Split Dollar Life Insurance
,Question:
Key Employee Life Insurance
Answer:
-Benefits company not person
-Business is beneficiary
-Premiums paid are not tax deductible
-Proceeds paid are not taxable
-In the event that the key employee no longer works for the company, yet
premiums are still paid, and they die, policy proceeds would go to company--
TEST
Question:
Partnership Life Insurance
Answer:
-Requires buy-sell agreement drafter by lawyer
-Each partner buys policy on the life of the other
-If partner dies, policy pays proceeds to the surviving partner
-Sometimes called a cross purchase buy-sell agreement
-If there are 3 partners a total of 6 policies would have to be sold
,Question:
Social Security Benefits
Answer:
-Small death benefit-only $255
-5 month waiting period
-Has survivors' benefits
-Benefits indexed for inflation
-Some benefits are based upon the Primary Insurance Amount (PIA)- The
amount a person would receive if they elect to begin receiving retirement
benefits at normal retirement age
Question:
Tax Treatment of Individual Life Insurance
Answer:
-Premiums are not tax deductible
-Proceeds are included in the value of the deceased's estate
Question:
Tax Treatment of Group Life Insurance
Answer:
-Tax deductible as business expense
, Question:
Tax Treatment of Modified Endowment Contracts (MEC)
Answer:
-Can't make profit for first 7 years
-Requires company to have a certain amount of risk
-Lose favored tax treatment
-If cash value exceeds the sum of all premiums paid; failed the 7-pay test
Question:
Types Disability Income Insurance
Answer:
-Individual Disability Income Policy
-Business Overhead Expense Policy (BOE)
-Business Disability Buyout Policy
-Group Disability Income Policy
-Key Employee/Partner Disability Policies
