To all of our PA students- the examination content outline is changing effective July 1, 2009.  There are not many changes, but we want to make sure that you are aware of these changes.  ProSchools‘ tradition of staying current rolls on!  Click on the following links to access your new content outline, and please make sure that you continue in this post for the additional material and their explanations:

For life insurance only candidates: click HERE

For accident and health insurance only candidates:  click HERE

For life and accident and health candidates:  click HERE

Additional Material Added Effective 7/1/2009

Section 11.2:  Disability Income:

Annual Renewable Term Rider: This is a rider added to a disability income (DI) policy that allows the insured to renew the policy annually to a certain age (commonly 65) without evidence of insurability.  This rider is normally added to individual disability income policies that are not issued “guaranteed renewable.”  The premium can increase annually on an individual basis.  In comparison, guaranteed renewable DI contracts guarantee the ability to renew to a certain age (commonly age 65) but cannot change the premium rate based on an individual’s situation.  Instead, guaranteed renewable policies state that the insurer can only raise rates on a “class” basis and only once per year on the policy’s anniversary.

Disability Reducing Term Rider: This rider is designed to cover a loan amount for a specified period of time. The amount of benefit decreases each year as the amount of the loan decreases.  The policy’s purpose is to pay the monthly loan payment while the owner is totally disabled.  The business purchases and owns the policy, the business owner is the insured person, and the business or the lender is the beneficiary, depending on the policy.  Premiums are not tax-deductible to the business and the benefits are received tax-free.

Section 16.0:  Federal Tax Considerations for Health Insurance

Taxation on Health Savings Accounts (HSAs) and Health Reimbursement Accounts (HRAs):

Payments for qualified medical expenses from an HSA or HRA are not subject to taxation.  Non-qualified withdrawals are subject to taxation at ordinary income tax rates and if the insured is under age 65, subject to an additional 10% penalty tax imposed on non-qualified withdrawals.  Once the insured turns 65, non-qualified withdrawals are only subject to taxation at ordinary income tax rates.  HSA contributions by an employee can be made on a salary reduction (pre-tax) basis (which serve to lessen the employee’s taxable income for that period) or on an after-tax basis.  If contributions are made on an after- tax basis, they are considered an “above-the-line” deduction on the employee’s income tax forms, thereby serving as a tax deduction (lessening the employee’s taxable income for that tax year).  Employers are able to deduct any contributions made on behalf of employees in the year the contribution was made.

Please let me know if you have any further questions on these additions.  We are in the process of changing our online courses to reflect these changes; this should be used as an interim step to have the current material if you are testing on or after 7/1/2009.

This entry was posted on Monday, June 29th, 2009 at 6:27 pm and is filed under Insurance Test Tips 101, Law Changes, Student Lounge. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.