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Nonqualified Annuities

A nonqualified annuity is purchased outside of an employer-provided retirement plan. After-tax dollars are used to fund a nonqualified annuity, so contributions are not deductible from gross income for income tax purposes. Taxes on interest or earnings in a nonqualified annuity are deferred until withdrawal. In a lump-sum distribution of a nonqualified annuity, the monies may be transferred into an IRA or similar vehicle to defer taxes additionally. Only a portion of a monthly annuity payment is taxed because each payment is partially principal that has been taxed and partially interest earned. The portion of the monthly payment that is excluded from taxes is determined by an exclusion ratio. The exclusion ratio is the total amount of premiums paid divided by the total expected payment amounts. If the expected return is based on a life expectancy or joint life expectancy, the Internal Revenue Service has tables and multipliers that are used to determine the total expected return. If the expected return is not based on a life expectancy, the total expected return is the sum of all amounts to be received.

Medicare - Supplemental Health Insurance - Need and Eligibility

There are many items that Original Medicare will not cover under either Part A hospitalization coverage or Part B medical insurance. These include routine care, such as annual medical checkups, eye examinations and corrective wear, dental work, and most immunizations. Items that are not medically reasonable or necessary are also excluded. Examples of these items include cosmetic surgery, private nurses, and personal conveniences. In addition to items that are not covered, Medicare beneficiaries must pay coinsurance, copayments, and deductibles, all of which increase their out-of-pocket costs and create a market for supplemental health insurance.

Social Security - Coordination of Benefits

To reduce the rising cost of providing employee benefits, many employers have set-off agreements that relate to the benefits they provide. When this is the case, Social Security benefits must be "coordinated" with those benefits. This often results in the worker receiving a reduced monthly sum from the Social Security Administration (SSA). In addition, the pensions of federal employees and railroad workers must be coordinated with Social Security benefits.

Unfair and Deceptive Insurance Practices; Rebating

In the insurance business, rebating is a practice whereby something of value is given to sell the policy that is not provided for in the policy itself. An example of rebating is when the prospective insurance buyer receives a refund of all or part of the commission for the insurance sale. Rebates can be made in the form of cash, gifts, services, payment of premiums, employment, or almost any other thing of value.

Employment - Veterans -Miscellaneous Benefits of Federal Government Employment to Veterans

In addition to receiving benefits in hiring and reductions in force, qualifying veterans, known as preference eligibles, receive many other benefits in federal government employment. These benefits include the restriction of some federal jobs to preference eligibles, lifetime eligibility for reinstatement, and the receipt of certain noncompetitive appointments.