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31 Cards in this Set

  • Front
  • Back
DC employer advantages:
Safe harbor plan
100% vesting
eliminate plan testing problems
DC employer advantages:
REG 404c
1)Provide education
2)Provide saf investment plus 4 other asset categories
3)Investment Policy statement Monitor investments at least annually
DC employee advantages:
1)catch up provison 50+
2)Distribution options
a. Lump sum
b. Distribution
c. annuitize
3)QDRO - option to split account if divorced (negotable)
other employee sponsered plans
1)Simple IRA
2)SEP-just for the employer
Retirment planning
1)Accumulation Phase
2)Distribution Phase
Types of Retirement Savings
1)Private Savings
2)Non-qualified employer sponsered plan
3)qualified employer sponsered plan
Private savings
After tax, taxable earnings
Non-qualified employer sponsored plan
-ability to discriminate:cant deduct
-Assets owned by company are subjected to backrupcy
-
Qualified employer sponsored plan:ER establishes...
1)tax deferal
2)Attract and retain employees
3)alturism for employees
4)union negotiated benefits
Qualified employer sponsored plan:Types of plans...
1)Defined Benefit:defines benefit guartees at retirment based on YOS, age, salary
2)Defined Contibution:defines contribution potenal without any gaurentees as the the benefit at retirment
Qualified employer sponsored plan:: Common fetures of DB and DC: Governed by the ERISA Act
1)eligibility rules
2)Funding
3)vesting:Ownership
4)Communication
5)Nondiscrimination
6)Beneficary must be named
Qualified employer sponsored plan: Distribution Rules
1)Fed/State Taxible
2)20% Fed withholding
3)10% early withdrawl penilty under 59 1/2
4)Rollover to other qualified plans
Requirments of a valid contract
1:agreement
2: Consideration
3:legal object
4:Competent parties
5:Legal form
Requirments of a valid contract:
Agreement
An offer and acceptence(accept, reject or conteroffer)
Requirments of a valid contract:
Consideration
1:statement in application
2:payment of premium
The insurance contract is:
1: a contract of adhesion:insuance company sets terms no negot.
2:a contract of good faith:dont hold back significant material. inconsistibility clause/2 years
3:Unilateral:promise is made by 1 party, the insurer
4:Personal:not subject to transfer
5:Aleatory:not an exchange of equal value
Unique features of life insurance contracts:
1: insurable interest
2:Actual cash value
3:valued policy:stated face value
4:Representations, not warranties:insured must provide correct info
5:common disaster clause
6:Suicide
7:Disappearence: 7 years(premiums must be paid though)
8:Murder by beneficiary
Standard provisions..
1:the grace period:31 days
2:Entire contract provisions
3:Misstatment of age
4:Reinstatement
Non-Forfeiture values..
1:Cash value
2:Reduce paid up insurance
3:Extended term insurance
Settlement options...
1:interest only
2:fixed period
3:life income
4:Fixed amount
Special provisions...
1:Suicide: 2 years
2: Aviation Exclusion
3:war exclusion
4: change of plan
5:waiver of premiums: if totally disabled:own occupation/any occupation
6:disability income
nonindividual designation:
beneficary may be:
Partnership
Aassociation
Corporation
Trustee
reverter clause
owner can name a new beneficary if they outlive them
Assignment-to tranfer money
1:irrevociable beneficiary--creditors have no claim
2:Bene is insured-creditors have claim
3:revocable bene-creditors have claim
Assignment-kinds of...
1:absolute assignment: totally transfers ownership
2:Collateral:assign only enough to cover the loan.
3 foirfitures of life insurance..
1:Loan or cash values
2:Paid-Up insurance
3: Extended term insurance to
Policy Ownership
1:Owner
2:Successor Owner
3:Change of owner
Policy PRoceeds
Proceeds: payable at death of the insured, unless suicide
Dividends options:Dividends may be paid in cash or...
1:Premium reduction option
2:dividend accumulation option
3:Paid up additions options
Dividend after death
the proceeds will include dividend from the year of insured's death
automatic premium loan
any premium not paid by the end of its grace period will be paid by charging the premium as a loan against the policy