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Ch 3: Taxes, Retirement & Other Insurance Concepts

About This Chapter

Strengthen your knowledge of taxes, retirement and other insurance concepts by taking advantage of this self-paced chapter. Examine informative lessons and take multiple-choice quizzes as you study for an upcoming class assignment, test or discussion.

Taxes, Retirement & Other Insurance Concepts - Chapter Summary

Use this chapter to gain greater insight into a variety of taxes, retirement and other insurance concepts. Fun lessons developed by top instructors give you a well-rounded look at group life insurance, third party insurance ownership, pension plans and much more. Access the lessons in any sequence that suits your current and desired knowledge of the subject area. When finished, you will be able to do the following:

  • Define third party insurance ownership, life settlements and viatical settlements
  • Identify types of group life insurance, and discuss insurance policy selection
  • List consideration factors in a personal life insurance needs analysis
  • Discuss key person insurance and how to fund buy-sell agreements with life insurance
  • Describe retirement plans, pension plans, and qualified and non-qualified retirement plans
  • Share common sources of income in retirement
  • Provide details about the tax treatment of individual and group life insurance
  • Explain the basics of a modified endowment contract (MEC)

Whether you only need a quick refresher on a few tax, retirement and insurance concepts or want to review the entire subject, you're in luck! All resources in this chapter are flexible, enabling you to access any feature whenever and however you'd prefer. In addition to boosting your comprehension with fun lessons, assess your knowledge by taking short quizzes and a chapter exam. If you have questions about any lesson topic, don't hesitate to send them to our experts.

15 Lessons in Chapter 3: Taxes, Retirement & Other Insurance Concepts
Test your knowledge with a 30-question chapter practice test
Third Party Insurance Ownership: Definition & Examples

1. Third Party Insurance Ownership: Definition & Examples

Third party insurance is where the owner of the policy and the insured are two different entities. It involves the policy owner, the insured and the beneficiary.

What is a Life Settlement? - Definition & Benefits

2. What is a Life Settlement? - Definition & Benefits

In some situations, selling a life insurance policy to a third party is a better option than surrendering the policy. In this lesson, you will learn about life settlements.

What is a Viatical Settlement?

3. What is a Viatical Settlement?

A viatical settlement occurs when a life insurance policy owner sells their policy to a third party for a fraction of the payout amount. In this lesson, we'll learn the ins and outs of qualifying for and considering a viatical settlement.

Group Life Insurance: Definition & Types

4. Group Life Insurance: Definition & Types

We can purchase life insurance individually or as part of a group plan. In this lesson, you'll learn more about what group life insurance is and the types of group life insurance offered.

Insurance Policy Selection: Needs Analysis & Premiums

5. Insurance Policy Selection: Needs Analysis & Premiums

In this lesson, we will review how to consider a person's needs and the amount of coverage for insurance policies. Let's also take a look at how premiums affect the total cost of insurance.

Personal Life Insurance Needs Analysis

6. Personal Life Insurance Needs Analysis

How do you know if you need life insurance? Do you have family? Significant bills? There are many questions you need to ask yourself before you start the process. This lesson will help you decide what you need.

What is Key Person Insurance?

7. What is Key Person Insurance?

A business that relies on one person to keep things going is at risk of a significant business interruption if that individual dies. In this lesson, you will learn about key person insurance.

Funding Buy-Sell Agreements With Life Insurance

8. Funding Buy-Sell Agreements With Life Insurance

You bet your life: buy-sell agreements can be funded with life insurance. This lesson will explain how a buy-sell agreement can be funded, and describe the benefits and drawbacks.

Understanding Retirement and Pension Plans

9. Understanding Retirement and Pension Plans

Businesses use many different types of retirement plans for their employees. Two of the most common are pension plans and 401(k) plans. This lesson discusses these two kinds of retirement plans.

What is a Qualified Retirement Plan? - Rules & Options

10. What is a Qualified Retirement Plan? - Rules & Options

This lesson includes an overview of qualified retirement plans, including explanations of the two types (defined benefit plan and defined contribution plan), rules, and options regarding withdrawals, and penalties.

Non-Qualified Retirement Plan: Types & Examples

11. Non-Qualified Retirement Plan: Types & Examples

In this lesson we will define and give examples of the four common types of non-qualified retirement plans available to corporate executives and other highly compensated employees.

Sources of Income in Retirement

12. Sources of Income in Retirement

In this lesson, learn several key ways that older adults pay their bills after retiring from work. You'll see how people can have different experiences in funding their retirement.

Tax Treatment of Individual Life Insurance

13. Tax Treatment of Individual Life Insurance

In most cases, a person's heir will not have to pay taxes on money received from a life insurance policy, but there are certain exceptions. In this lesson, we will review examples of when an insurance payment creates a tax bill.

Tax Treatment of Group Life Insurance

14. Tax Treatment of Group Life Insurance

In this lesson we will briefly review how the proceeds as well as any premiums or dividends associated with group life insurance policies are taxed by the federal government.

Modified Endowment Contract (MEC)

15. Modified Endowment Contract (MEC)

When does a life insurance policy cease to be one (and thus forfeit any tax benefits for the beneficiaries)? The answer is a modified endowment contract (MEC). This lesson will define an MEC and explain the tax implications of such contracts.

Chapter Practice Exam
Test your knowledge of this chapter with a 30 question practice chapter exam.
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Practice Final Exam
Test your knowledge of the entire course with a 50 question practice final exam.
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