What types of regulations are in place regarding fringe benefits?

June 30, 2024 No Comments

A: Government influence on non-salary employee benefits, also called “fringe benefits,” comes, in large part, through the tax code. The Internal Revenue Service (IRS) issues publications on the tax treatment of certain non-salary employee benefits, many of which are deductible to the employer. Certain benefits,

When is it a good idea to use an irrevocable life insurance trust?

June 30, 2024 No Comments

A: The irrevocable life insurance trust (ILIT) is a trust that cannot be rescinded, amended or modified in any way after its creation. Once the grantor contributes property or life insurance death benefits to the trust, he or she cannot change the terms of the trust or

Who can make catch-up contributions to a Health Savings Account (HSA)?

June 30, 2024 No Comments

A: An eligible individual who is 55 years or older at the end of his tax year can make additional catch-up contributions to his Health Savings Account (HSA). The U.S. Internal Revenue Service (IRS) states that an individual can qualify for an HSA if he

Why do insurance policies have deductibles?

June 30, 2024 No Comments

A: Insurance policies have deductibles for behavioral and financial reasons. Moral Hazards Deductibles mitigate the behavioral risk of moral hazards. A moral hazard describes the risk that two parties to an agreement or contract may not act in good faith. Because insurance policies protect the

Why is my insurance premium so high/low?

June 30, 2024 No Comments

Insurance premiums can be affected by many factors including: type and amount of risk size of deductible amount of coverage age of the applicant applicant’s medical history applicant’s past and current lifestyle Insurance policies can be issued at the group or individual level. When group

What is the difference between a copay and a deductible?

June 30, 2024 No Comments

A: Copays and deductibles are features of health insurance plans. A copay is a fixed amount paid by a patient for receiving a particular health care service, with the remaining balance covered by his insurance company. A deductible is a fixed amount a patient must

What is the difference between term and universal life insurance?

June 30, 2024 No Comments

A: Term life insurance is the most basic of insurance policies. It is nothing more than an insurance policy that provides protection for accidental death and possibly debilitating injuries for a specified period of time. If you or your beneficiaries do not make any claims

What is the expense ratio in the insurance industry?

June 30, 2024 No Comments

A: The expense ratio in the insurance industry is a measure of profitability calculated by dividing the expenses associated with acquiring, underwriting and servicing premiums by the net premiums earned by the insurance company. The expenses can include advertising, employee wages and commissions for the

What does the underwriter do in a new stock offering?

June 30, 2024 No Comments

A: The underwriter in a new stock offering serves as the intermediary between the company seeking to issue shares in an initial public offering (IPO) and investors. The underwriter helps the company prepare for the IPO, considering issues such as the amount of money sought

What effect did the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 have on debtors?

June 30, 2024 No Comments

A: Credit card companies and banks hate deadbeats who take from their bottom lines. They especially dislike the Chapter 7 bankruptcy that discharges a debtor and, if he or she has no saleable assets, eliminates their chances of reclaiming even a portion of the debt.

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