1. What types of benefits are commonly offered as part of a welfare benefit arrangement?
retirement income benefits
post retirement medical benefits
death benefits
deferred compensation benefits

2. Death benefits are insured using which types of products?
flexible premium policies, such as UL or VUL
term policies
only whole life policies
a combination of permanent and/or term insurance

3. Death benefits are limited in amount by?
not more than 10 times compensation
not more than 15 times compensation
only by financial underwriting standards of carrier
not more than $50,000 per individual

4. Death benefits can be used for any life insurance need except:
income replacement to family
key man insurance
cross purchase buy and sell agreement
estate settlement cost planning

5. Life insurance is used in the plan for these purposes?
to provide the stated death benefit
as the investment vehicle of the plan assets
to reimburse the employer for benefit costs paid for employees
as COLI benefits

6. What is the tax consequence to the employees of the employer sponsored death benefits?
employees pay no tax on the benefit
beneficiaries pay tax on the death proceeds
employees are taxed on the economic benefit using Table 2001 or a valid alternative term rate
employees are taxed on the full premium paid

7. Post retirement medical benefits cannot discriminate in favor of the highly compensated employees?
True
False

8. Death benefits cannot discriminate in favor of the highly compensated employees?
True
False

9. Funding of post retirement medical benefits must be coordinated with any funding of a defined contribution plan, including any profit sharing or 401(k) plan?
True
False

10. Funding of post retirement medical benefits must be coordinated with any funding of a defined contribution plan, including a 412(i) fully insured plan?
True
False

11. Deductions for benefits are limited to the qualified direct costs of the benefits, and are either actuarially determined or pursuant to safe harbors provided in the tax code?
True
False

12. There are no differences between a multiple employer arrangement and a single employer welfare plan with respect to the benefits permitted?
True
False

13. Employers, acting as the Plan Administrator, can select the sub account allocations of variable life insurance policies?
True
False

14. One of the many reasons that small business are interested in funding post retiree medical benefits in their welfare plan is the concern regarding the expected increases in health care costs. Name another reason small businesses would want to fund now for post retiree medical care costs?

15. When discussing retirement planning with a client, income needs, age at retirement and health care costs are common topics. If a small business owner expects to pay for long term care premiums and health care premiums such as supplement Medicare coverage, he could fund for those costs now and use the accumulated assets in retirement for those premiums. Is there a deduction limit to funding those costs now? Explain.

16. Post retiree medical benefits are an age-based benefit and are a non-discriminatory benefit. Describe an ideal prospect?

17. Post retiree medical benefits are an age-based benefit and are a non-discriminatory benefit. Describe a prospect that would not be a good candidate for the plan?

18. Reimbursement for health care costs in retirement can be paid from the plan on a tax-free basis, and the funding has been achieved on a tax-deductible basis. Describe some health care costs that are allowable for reimbursement?