Key Concepts
Buy-Sell Agreement - Agreement that a deceased business owner's interest will be sold and purchased at a predetermined price or at a price according to a predetermined formula.
Coverdell Education Savings Account - Tax-favored contributions for funding formal education expenses until the individual turns age 18. If the funds are not used for their intended purpose, they are taxed as the recipient's income and subject to a 10% penalty
Deferred Compensation Plans - The deferral of an employee's compensation to some future age or date. These plans are frequently used to provide fringe benefits, such as retirement income, to selected personnel.
Employee Benefit Plans - Plans through which employers offer employees benefits such as coverage for medical expenses, disability, retirement, and death.
Human Life Value - An individual's economic worth, measured by the sum of his or her future earnings that is devoted to his or her family.
Key Person Insurance - Protection of a business against financial loss caused by the death or disablement of a vital member of the company, usually individuals possessing special managerial or technical skill or expertise.
Needs Approach - A method of determining how much insurance protection a person should have by analyzing a family's or business' needs and objectives should the insured die, become disabled, or retire.
Salary Continuation Plans - An arrangement whereby an income, usually related to an employee's salary, is continued upon employee's retirement, death, or disability.
Split Dollar Life Insurance - An arrangement between two parties where life insurance is written on the life of one, who names the beneficiary of the net death benefits (death benefits less cash value), and the other is assigned the cash value, with both sharing premium payments.
Familiarize yourself with the Key Concepts in the Florida study manual, Unit 14.
