A noncontributory group disability income plan has a 30-day waiting for period and offers benefits of $2,000 month. If any employee is unable to work for 7 months due to a covered disability, the employee will receive

$12,000 all of which is taxable

All of the following are true regarding Key Employee Disability Income insurance EXCEPT
a. Benefits are taxable to the employer
b. The employer owns the policy
c. Benefits are paid to the employer to retrain a new person
d. Premiums are not tax deductible

a) Benefits are taxable to the employer

An insured is the recipient of an Accidental Death and Dismemberment (AD&D) policy purchased by his employer. The policy pays triple indemnity in case of accidental health. If the insured died as a result of an accident stipulated in the policy, how will

Benefits received are considered income tax free

An insured is covered by a partially contributory group disability income plan that pays benefits of $4,000 a month. If the insured pays 25% of the monthly premium, how much of the monthly benefit would be taxable?

$3,000

An individual is insured under his employer's group Disability Income policy. The insured suffered an accident while on vacation that left him unable to work for 4 months. If the disability income policy pays the benefit, which of the following would be t

Benefits that are attributable to employer contributions are fully taxable to the employee as income

Group disability income insurance premiums paid by the employer are

Deductible by the employer as an ordinary business expense

How are excess funds in an employee's HSA handled?

The funds can be carried forward to the next year

In an individual long-term care insurance plan, the insured is able to deduct the premiums from taxes. What income taxation will be imposed on the benefits received?

No tax

Premiums paid by self-employed sole proprietors or partners for medical expense insurance are

Totally tax deductible

Premium payments for personally-owned disability income policies are

Not tax deductible

S is a sole business proprietor who owns a medical expense plan. What percentage of the cost of the plan may he deduct?

100%

The benefits received by the business in a Disability Buy-Sell policy are

Income tax free

The sole proprietor of a business makes a total salary of $50,000 a year. This year, his medical expenses have reached a total of $75,000. What amount may the sole proprietor deduct in regards to his medical expenses?

$50,000

Under a Key Person disability income policy, premium payments

Are made by the business and are not tax-deductible

Under what condition are group disability income benefits received by an employee NOT taxable as income?
a. When the benefits received are equal or less than the employee's percentage of the contribution
b. When the employer makes all the premium payments

a) When the benefits received are equal or less than the employee's percentage of contribution

What percentage of individually-owned disability income benefits is taxable?

0%

When may an insured deduct unreimbursed medical expenses paid under a long-term care policy?

When the expenses exceed a certain percentage of the insured's adjusted gross income

Which of the following is true regarding the taxation of the premium in group accidental death and dismemberment policies?

It is deductible as an ordinary business expense

Which of the following determines whether disability insurance benefits are taxed?

Whether the premiums were tax deductible

Which of the following is INCORRECT concerning taxation of disability income benefits?
a. If the insured paid the premiums, any disability income benefits are tax-free
b. If the benefits are for a permanent loss, the benefits paid to the employee are not

c) If paid by the individual, the premiums are tax deductible

Which of the following is true regarding benefits paid to disabled employees?

They may be subject to taxation if the premium was paid by the employer

Which of the following describes taxation of individual disability income insurance premiums and benefits?

Premiums are not tax deductible, and benefits are not taxable

Which of the following is not true of Disability Buy-Sell coverage?

Benefits are considered taxable income to the business

All of the following are true of the Key Person disability income policy EXCEPT
a. The income may be used to find a replacement for the key employee
b. Benefits are considered taxable income to the business
c. Premiums are not deductible to the business
d

b) Benefits are considered taxable income to the business