Exam Tips Flashcards
Insurable Risks are CHAD
not Catastrophic, Homogeneous exposure units, Accidental, and measurable and Determinable
A legal contract requires COALL!
Competent parties, Offer and Acceptance, Legal consideration, and Lawful purpose
What are the five dividend options? (CRAP-O)
Cash – clients receive the money and can use it or invest it as they wish.
Accumulate at Interest – the company invests the dividends and they are tax-free up to the client’s basis in the policy. Interest paid on the dividends is taxable.
Reduce Premiums – decreases the out-of-pocket expense for premiums.
Paid-up Additions – purchases additional insurance each year for insured regardless of health or occupation.
One-year Term – adds term insurance each year to the policy face amount equal to cash value of the policy. Also known as the 5th dividend option on the CFP® Exam!
