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George owns a small consulting firm. His company is profitable and is growing every year. George wants to make sure that the company is protected if he were disabled and unable to work. He meets with Loukas, his insurance agent, who suggests that he purchase a business overhead insurance policy. Loukas informs him that the annual premium for the policy is $3,600. The monthly benefit is $5,000 payable over 2 years. George is satisfied with the policy but wants to know how the policy will be taxed. Which of the following answers is CORRECT? Select one correct answer from the list 1. The premiums are tax deductible, and the benefits are treated as taxable income. The premiums are tax deductible, and the benefits are not treated as taxable income. The premiums are not tax deductible, and the benefits are treated as taxable income. 4. The premiums are not tax deductible, and the benefits are not treated as taxable income. 2 3. O O O O Evia and Stephen meet with Thomas, their insurance agent, to review their insurance needs. Thomas tells them that he needs to ask personal questions such as their age and gender, so that the insurer can calculate their premiums. Evia wants to know why this information is needed to determine the insurance premium. Which of the following rationale could form part of Thomas's CORRECT response? Select one correct answer from the list Age is important because the likelihood of disability occurring increases with the age of the life insured. Gender is important because the number of claims is lower for women than for men. Older applicants will likely be faced with higher premiums than young ones. 4 Gender is important because the duration of claims is higher for men than for women. 2 3. Test attachments: ΟΟΟΟ

George owns a small consulting firm. His company is profitable and is growing every year. George wants to make sure that the company is protected if he were disabled and unable to work. He meets with Loukas, his insurance agent, who suggests that he purchase a business overhead insurance policy. Loukas informs him that the annual premium for the policy is $3,600. The monthly benefit is $5,000 payable over 2 years. George is satisfied with the policy but wants to know how the policy will be taxed. Which of the following answers is CORRECT? Select one correct answer from the list 1. The premiums are tax deductible, and the benefits are treated as taxable income. The premiums are tax deductible, and the benefits are not treated as taxable income. The premiums are not tax deductible, and the benefits are treated as taxable income. 4. The premiums are not tax deductible, and the benefits are not treated as taxable income. 2 3. O O O O Evia and Stephen meet with Thomas, their insurance agent, to review their insurance needs. Thomas tells them that he needs to ask personal questions such as their age and gender, so that the insurer can calculate their premiums. Evia wants to know why this information is needed to determine the insurance premium. Which of the following rationale could form part of Thomas's CORRECT response? Select one correct answer from the list Age is important because the likelihood of disability occurring increases with the age of the life insured. Gender is important because the number of claims is lower for women than for men. Older applicants will likely be faced with higher premiums than young ones. 4 Gender is important because the duration of claims is higher for men than for women. 2 3. Test attachments: ΟΟΟΟ

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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George owns a small consulting firm. His company is profitable and is growing every year. George wants to make sure that the company is protected if he were disabled and unable to work. He meets with Loukas, his insurance agent, who suggests that he purchase a business overhead insurance policy. Loukas informs him that the annual premium for the policy is $3,600. The monthly benefit is $5,000 payable over 2 years. George is satisfied with the policy but wants to know how the policy will be taxed. Which of the following answers is CORRECT? Select one correct answer from the list 1. The premiums are tax deductible, and the benefits are treated as taxable income. The premiums are tax deductible, and the benefits are not treated as taxable income. The premiums are not tax deductible, and the benefits are treated as taxable income. 4. The premiums are not tax deductible, and the benefits are not treated as taxable income. 2 3. O O O O
Transcribed Image Text:George owns a small consulting firm. His company is profitable and is growing every year. George wants to make sure that the company is protected if he were disabled and unable to work. He meets with Loukas, his insurance agent, who suggests that he purchase a business overhead insurance policy. Loukas informs him that the annual premium for the policy is $3,600. The monthly benefit is $5,000 payable over 2 years. George is satisfied with the policy but wants to know how the policy will be taxed. Which of the following answers is CORRECT? Select one correct answer from the list 1. The premiums are tax deductible, and the benefits are treated as taxable income. The premiums are tax deductible, and the benefits are not treated as taxable income. The premiums are not tax deductible, and the benefits are treated as taxable income. 4. The premiums are not tax deductible, and the benefits are not treated as taxable income. 2 3. O O O O
Evia and Stephen meet with Thomas, their insurance agent, to review their insurance needs. Thomas tells them that he needs to ask personal questions such as their age and gender, so that the insurer can calculate their premiums. Evia wants to know why this information is needed to determine the insurance premium. Which of the following rationale could form part of Thomas's CORRECT response? Select one correct answer from the list Age is important because the likelihood of disability occurring increases with the age of the life insured. Gender is important because the number of claims is lower for women than for men. Older applicants will likely be faced with higher premiums than young ones. 4 Gender is important because the duration of claims is higher for men than for women. 2 3. Test attachments: ΟΟΟΟ
Transcribed Image Text:Evia and Stephen meet with Thomas, their insurance agent, to review their insurance needs. Thomas tells them that he needs to ask personal questions such as their age and gender, so that the insurer can calculate their premiums. Evia wants to know why this information is needed to determine the insurance premium. Which of the following rationale could form part of Thomas's CORRECT response? Select one correct answer from the list Age is important because the likelihood of disability occurring increases with the age of the life insured. Gender is important because the number of claims is lower for women than for men. Older applicants will likely be faced with higher premiums than young ones. 4 Gender is important because the duration of claims is higher for men than for women. 2 3. Test attachments: ΟΟΟΟ
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