Health & life insurance Questions with
100% Correct Answers
qualified retirement plan Correct Answer: approved by the IRS, which then
gives both the employer and employee benefits in deductibility of contributions
and tax deferral of growth.
A qualified retirement plan characteristics Correct Answer: Designed for the
exclusive benefit of the employees and their beneficiaries
Are formally written and communicated to the employees
Use a benefit or contribution formula that does not discriminate in favor of the
prohibited group - officers, stockholders, or highly paid employees
Are not geared exclusively to the prohibited group
Are permanent
Are approved by the IRS
Have a vesting requirement
qualified plans tax advantages Correct Answer: Employer contributions are tax
deductible and are not taxed as income to the employee;
The earnings in the plan accumulate tax deferred;
Lump-sum distributions to employees are eligible for favorable tax treatment.
Self-Employed Plans (HR 10 or Keogh Plans Correct Answer: Contribution limits
are the lesser of an established dollar limit or 100% of their total earned income.
, The contribution is tax deductible, and it accumulates tax deferred until
withdrawal.
-must be self-employed or a partner working part time or full time who owns at
least 10% of the business.
Upon a participant's death, payouts can be available immediately. If a
participant becomes disabled, he or she may collect benefits immediately or
the funds can be left to accumulate. When a participant enters retirement,
distribution of funds must occur no earlier than 59½ and no later than 70½. If
withdrawn before 59½, there is a 10% penalty. At any time payments may be
discontinued with no penalty, and funds can be left to accumulate.
401k Correct Answer: Pure salary reduction plan;
Bonus plan; or
Thrift plan.
-Under a 401(k) plan, participants may choose to either receive taxable cash
compensation or have the money contributed into the 401(k), referred to as
cash or deferred arrangement plans (CODA
SIMPLE Plans Correct Answer: A SIMPLE (Savings Incentive Match Plan for
Employees) plan is available to small businesses that employ not more than 100
employees receiving at least $5,000 in compensation from the employer during
the previous year. To establish a SIMPLE plan, the employer must not have a
qualified plan already in place. Employees who elect to participate may defer
up to a specified amount each year, and the employer then makes a matching
contribution, dollar for dollar, up to an amount equal to 3% of the employee's
100% Correct Answers
qualified retirement plan Correct Answer: approved by the IRS, which then
gives both the employer and employee benefits in deductibility of contributions
and tax deferral of growth.
A qualified retirement plan characteristics Correct Answer: Designed for the
exclusive benefit of the employees and their beneficiaries
Are formally written and communicated to the employees
Use a benefit or contribution formula that does not discriminate in favor of the
prohibited group - officers, stockholders, or highly paid employees
Are not geared exclusively to the prohibited group
Are permanent
Are approved by the IRS
Have a vesting requirement
qualified plans tax advantages Correct Answer: Employer contributions are tax
deductible and are not taxed as income to the employee;
The earnings in the plan accumulate tax deferred;
Lump-sum distributions to employees are eligible for favorable tax treatment.
Self-Employed Plans (HR 10 or Keogh Plans Correct Answer: Contribution limits
are the lesser of an established dollar limit or 100% of their total earned income.
, The contribution is tax deductible, and it accumulates tax deferred until
withdrawal.
-must be self-employed or a partner working part time or full time who owns at
least 10% of the business.
Upon a participant's death, payouts can be available immediately. If a
participant becomes disabled, he or she may collect benefits immediately or
the funds can be left to accumulate. When a participant enters retirement,
distribution of funds must occur no earlier than 59½ and no later than 70½. If
withdrawn before 59½, there is a 10% penalty. At any time payments may be
discontinued with no penalty, and funds can be left to accumulate.
401k Correct Answer: Pure salary reduction plan;
Bonus plan; or
Thrift plan.
-Under a 401(k) plan, participants may choose to either receive taxable cash
compensation or have the money contributed into the 401(k), referred to as
cash or deferred arrangement plans (CODA
SIMPLE Plans Correct Answer: A SIMPLE (Savings Incentive Match Plan for
Employees) plan is available to small businesses that employ not more than 100
employees receiving at least $5,000 in compensation from the employer during
the previous year. To establish a SIMPLE plan, the employer must not have a
qualified plan already in place. Employees who elect to participate may defer
up to a specified amount each year, and the employer then makes a matching
contribution, dollar for dollar, up to an amount equal to 3% of the employee's
