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11 Cards in this Set
- Front
- Back
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What is a one year term option
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The dividend, not the interest on the dividend, is used to purchase a one year term policy in the amount of the cash value.
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Payor Benefit Rider
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Pays the premium if the payor becomes disabled or dies. Doesn't increase the death benefit.
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What type of insurance is spouse term rider
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Level term
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What is the paid-up option?
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The insurer can accumulate dividents at interest and use them, in addition to the interest and policies cash value to pay earlier than planned.
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How is the paid up option different than paid up additions
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Paid up option = policy is paid up earlier than planned.
Paid up additions = Policy increases in value. |
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Buy Sell Agreement - What is it...for LI purposes.
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If owner or partner dies, the business must be sold in order to settle the deceased estate. The life insurance is used by the family members to buy the business. The policy is used to establish the intent to purchase the business.
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Cross purchase plan v. Entity Plan of Buy Sell
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In cross purchase, the partners have agreements to buy out each other. In entity plan, the business has the obligation to buy out the other in case of death.
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Who is the owner, policy holder and beneficiary in a Key Employee Policy
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Employer
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What is Split Dollar Plan
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The employer and employee split the premium. When Death Occurs, the employer gets death benefit of the cash value or the amount of premiums paid, whichever greater. There is no tax deduction for the empolyer. The balance of the benefit is paid to the employees bene and the employer.
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What is a Keogh Plan
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It is a retirement plan for self-employed.
Money goes in pre-tax. -Must own at lease 10% of business -Max contribution-46K, or 100% of total earned income. -Taxed upon withdrawal. |
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What are the contributions to an IRA
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Indificual - 100% up to 5K
Married (double, even if only one works) Over 50 can do catch-up which is 1k more. |
