Policyholder dividends from a whole life insurance policy are generally tax exempt. In which of the following situations would the policyholder dividend be tax exempt?
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Policyholder dividends from a whole life insurance policy are generally tax exempt. In which of the following situations would the policyholder dividend be tax exempt?
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- A. Which of the following is TRUE regarding a whole life insurance policy that pays a dividend? When the dividend is paid, it is taxed to the policyholder as an ordinary dividend The dividend is automatically credited against future premiums The dividend is paid directly to the beneficiary on the policy When the dividend is paid, it can be used to purchase additional coverage B. Each employee covered under a group life policy MUST be given: An individual certificate of insurance A certificate of insurance for each family member covered An insurance identification card for each family member covered A copy of the group master contract C. Universal life products are flexible premium policies that are: Interest sensitive Guaranteed issue Non-renewable Term only D. Which of the following statements is CORRECT about life insurance proceeds paid to a named beneficiary? They are exempt from claims by the insurance creditors They are subject to excise taxes…In case of life insurance policies with profits, policy holders are given the right to participate in the profits of the business and for this purpose insurance company will pay: a. Claims to policy holders b. Bonus to policy holders c. Consideration to policy holders d. Annuity to policy holdersLife insurance premiums shall be reported as a deductible expense for financial reporting purposes if the company paying it is the beneficiary. Required: True or False
- The Employee Retirement Income Security Act (ERISA) requires that companies fund defined-benefit plans, but no such requirement exists for other postretirement benefits such as health insurance. Considering the characteristics of retirement benefits as compared to the characteristics of other postretirement benefits, what impact does this have on a company's financial statements?Explain how cash-basis accounting for pension plans differsfrom accrual-basis accounting for pension plans.Why is cash-basis accounting generally considered unacceptablefor pension plan accounting?Define each of the given and describe the different EXCLUSIONS FROM GROSS INCOME: Proceeds of life insurance policy Amount received by the insured as a return of premium Gift, bequest, or descent Compensation for injuries or sickness Income exempt under treaty Retirement benefits, pensions, gratuities, etc.
- Which of the following is an arrangement by which one party promises to pay a sum of money to policyholder as protection against an adverse or unfavorable occurrence of event? a. Short Term Loans b. Fixed Deposit c. Insurance d. InvestmentUnder a deferred annuity owned by a nongrantor trust, how does the annuity's death benefit operate?(Search Chapter 6) a. The death of the trust grantor triggers payout of the contract's death benefit and termination of the contract. b. The death of the primary annuitant triggers payout of the contract's death benefit and termination of the contract. c. The death of the trust beneficiary triggers payout of the contract's death benefit and termination of the contract. d. Annuities owned by a trust can continue in perpetuity; since trusts do not die, there is no death benefit payable from an annuity owned by a trust.Identify which is taxable? A. Proceeds of life insurance received by heirs B. Excess amount received over premiums paid by insured upon surrender of policy C. Compensation for personal injuries of an employee D. Indemnification for moral damages
- You are not required to monitor the investments held through your spouse's pension plan if those investments are managed and chosen by an intermediary (e.g. the plan administrator ) based on decisions made by your spouse. Is this statement true or false? True FalseQualified plan assets are placed into and held by a trust. What can the trust distribute to the employer? Select one: a. Nothing b. Special distributions and dividends c. Excess contributions d. Annual forfeituresKindly help Which of the following statements about life insurance is NOT accurate? a) permanent insurance puts a portion of the premium paid into investment which the insured then has the potential to cash in and recoup, whereas the premium paid for term insurance is simply a sunk cost for the insured . b) permanent insurance guarantees that the policy will pay out the face value to the beneficiary upon the death of the insured , whereas term insurance won't pay out anything at all once the term has finished. c) Term insurance is almost always less expensive than permanent insurance- both the monthly premium amount as well as the amount typically spent on insurance overall. d) Term insurance is simple life insurance policy that involves a less complicated contract with fewer provisions and exemptions , whereas permanent is the type of insurance that you must take care in reading the detailed fine print in the policy
