A RETIREMENT PLANNING MINI-CASE / TUTORIALOUTLET DOT COM A RETIREMENT PLANNING MINI-CASE / TUTORIALOUTLET D | Page 8

II. Distributions from the annuity, after age 59½, will be taxed at the
long-term capital gain rate if the annuity
has been in existence for at least one year.
III. Distributions from the VUL policy, if made in the form of a loan,
will be taxed at the Mayfields’ marginal tax
rate.
IV. Distributions in the form of a VUL loan need not be reported on
IRS Form 1040 for tax purposes.
a. I and II only
b. III and IV only
c. I and IV only
d. II, III, and IV only
9. Reducing a client’s life expectancy assumption will have which of
the following effects?
a. Increase the amount of life insurance needed.
b. Decrease the amount of retirement assets needed.
c. Increase the amount of retirement assets needed.
d. Both a and c are correct.
10. Which of the following disability insurance statements is true?
a. All of the benefits received by Peter from his disability coverage
will be taxable because his employer paid the
premium.
b. None of the benefits received by Peter from his disability coverage
will be taxable because his employer paid
the premium.
c. If Ann becomes disabled, she is eligible for coverage under her
state’s workers’ compensation program.
d. Both a and c are correct.
e. Both b and c are correct.
11. Peter and Ann have been discussing the possibility of retiring as
early as age 60. What do the Mayfields need to
consider as factors that will impact the costs, risks, and benefits of
this objective when conducting their planning?
a. Distributions from their qualified retirement plans at that time will
be subject to a 10% early withdrawal penalty.
b. They can deal with the loss of health insurance by extending their
current health insurance coverage using both