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Cards In This Set
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Multiple Employer Trusts
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A group of small employers combining to obtain group insurance that otherwise might not be obtainable
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Contributory vs Non-Contributory
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When the employer pays all of the premiums the plan is noncontributory. 100% of eligible employees are included.
Contributory plan requires 75% of eligible employees are included.
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Modified Endowment Contract (MEC)
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Seven pay test to insure policy is not over funded and than subject to taxes. MEC policy changes FIFO to LIFO which than becomes taxable.
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What is the penalty for early withdraw?
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10% penalty before the age of 59 1/2.
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What does the term fully insured mean?
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Someone who has earned 40 quarters is entitled to receive social secruity, medicare and survivor benefits.
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When does retirement benefits begin?
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When a worker has earned 40 quarters (10 years) or reaches the age of 65
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When are disability benefits available?
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When a fully-insured worker becomes totally and permanently disabled prior to reaching 65. The worker must be unable to engage in any substantial, gainful employment. The disability must be expected to last for at least 12 months or be expected to end in the woarkers death. There is a 5 month waiting period before benefits begin.
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Key Employee Insurance
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The employer is the policyowner, premium payor and the beneficiary. Protects from loss of profit
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