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Refers to a tax-free transfer of funds from one retirement program to a traditional IRA or a transfer of interest in a traditional IRA from one trustee directly to another.
What is a transfer
This is a tax-free distribution of cash from one retirement plan to another. Must be completed in 60 days
What is a rollover
used to accumulate specific amounts of monies for specific needs with guarantees that the money will be available when needed
What is Cash Accumulation
Contribute 100% of income up to an IRS-specified limit
What is both a Traditional and Roth IRA
The business would use the money for the additional costs of running the business and replacing the employee in the event this type of employee dies.
What is Key Person Insurance
When an insured purchases a life insurance policy, they will have an estate of at least that amount the moment the first premium is paid
What is Estate creation
Participants (insureds) under the plan do not receive a policy because they do not own or control the policy.
What is group insurance
Life insurance can provide the funds necessary for the survivors of the insured to be able to maintain their lifestyle in the event of the insured's death
What is Survivor Protection
Refers to any financial transaction in which the owner of a life insurance policy to a third party for some form of compensation, usually cash.
What is life settlements
Policy's cash values can be borrowed against at any time and used for immediate needs.
What is Liquidity
legal contract that determines what will be done with a business in the event that an owner dies or becomes disabled.
What is Buy- Sell Funding
A life insurance arrangement in which a person with no relationship to the insured (a "stranger") purchases a life policy on the insured's life with the intent of selling the policy to an investor and profiting financially when the insured dies.
What is a STOLI (Stranger-originated life insurance)
Also referred to Old Age Survivors Disability Insurance-OASDI
What is Social Security
is another name for a STOLI, where a third-party investor who has no insurable interest in the insured initiates a transaction designed to transfer the policy ownership rights to someone with no insurable interest in the insured and who hopes to make a profit upon the death of the insured or annuitant.
What is a IOLI (Investor- owned life insurance)
Issued to the sponsoring organization, and covers the lives of more than one individual member of that group.
What is group insurance
In this plan, Payouts must began at age 73
What is a traditional IRA
Grows tax free (if account open for at least 5years)
What is a Roth IRA
Designed to provide protection for eligible workers and their dependents against financial loss due to old age, disability, or death.
What is Social Security?
Proceeds may be used to pay inheritance taxes and federal estate taxes so that it is not necessary for the beneficiaries to sell off the assets.
What is estate conservation
Plan APPROVED by the IRS,CANNOT DISCRIMINATE, ALL WITHRAWLS ARE TAXED
What is a Qualified Plan
Legal term used to identify an individual or entity that is not an insured under the contract, but that has a legally enforceable right under it.
What is third party ownership
A federal law that sets minimum standards for voluntarily established pension and health plans in the private market
What is ERISA (Employment Retirement Income Security Act) of 1974
Purpose or nature of the group, Size of the group, Turnover of the group, Turnover of the group, Financial strength of the group
What are the characteristics of group insurance
Contributions NOT currently TAX DEDUCTIBLE, DOES NOT NEED IRS APPROVAL, CAN DISCRIMINATE
What is a Non-Qualified Plan
An arrangement where the employer offers to give the employee a wage increase in the amount of the premium on a new life insurance policy on the employee.
What is executive bonuses