Pennsylvania Life and Health Insurance Exam Practice Question
Which is a requirement of a qualified plan?
Correct Answer: D
Rationale: A qualified plan must be designed for the exclusive benefit of employees and their beneficiaries, ensuring that the funds are used to provide retirement and financial security.
Option A is incorrect as qualified plans are typically long-term arrangements, not temporary. Option B, while approval by the IRS is necessary for tax benefits, it is not a defining requirement of a qualified plan itself. Option C is misleading; while many qualified plans include a vesting schedule, it is not universally required for all qualified plans. Thus, option D encapsulates the fundamental purpose of qualified plans effectively.
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