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CFP TL VERSION > Insurance Review > Flashcards

Insurance Review Flashcards

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CFP® flashcards
1
Q

het·er·o·ge·ne·ous

A

Different or diverse risks

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2
Q

Homogeneous

A

The same or similar risk

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3
Q

Principle of indemnity

A

When cash value equals DB.

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4
Q

sub·ro·ga·tion

A

the substitution of one person or group by another in respect of a debt or insurance claim,

Example: force carrier to provide you a new car for accident that isnt your fault. They take over the claim.

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5
Q

Collateral source rule

A

Can sue for injury damages even if they have their own personal loan. tort law. Double pmt.

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6
Q

Declarations

A

Identifies person, property or activity that is insured.

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7
Q

Insuring agreement

A

Explains the promise of the insurance company

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8
Q

Attractive nuisance

A

Swimming pool

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9
Q

Negligence per se

A

Violate a statute. School zone or crosswalk

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10
Q

Strict liability

A

Product liability. Romaine lettuce ecoli breakout

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11
Q

Absolute liability

A

Extra hazardous condition. Workers comp and wild animals

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12
Q

Vicarious liability

A

One person is held responsible for negligent behavior of another. Branch mgr responsible for agents

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13
Q

Capital utilization calculation for life insurance

A

Deceased salary 120k, spouse gets $20k social security, rate is 7%.

120k-20k=100k
100k / .07 = $1,428,571
Add $100k for 1st yr = $1,528,571

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14
Q

HO Section I

A

Dwelling
Other structures
Personal property
Loss of use

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15
Q

HO Section II

A

Personal liability

Medical pmts

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16
Q

Basic perils

A

WHARVVES/FLT

17
Q

Broad Form

A

Basic plus RAFF

Ruptured system
Artificial energy
Falling objects
Freezing pipes

18
Q

Open Form

A

Best coverage. Covers everything except specific exclusions

19
Q

Forms of HO coverage

A 
HO-2: broad
HO-3: Open
HO-5: HO-3 plus personal property
HO-4: Renters - covers personal property
HO-6: condo
HO-8: old homes
20
Q

HO Exclusions - 8

A

OPEN WIF

Ordinance of law
Power failure
Earthquake
Neglect and nuclear
War
Intentional loss
Flood
21
Q

PAP - Comp coverage (other than collision

A 
Glass breakage
Mistakes
Falling objects
Fire, theft, larceny
Flood
Earthquake
Hail
Vandalism
Contact with bird
Explosion
22
Q

Medicare Part A - hospital insurance

A 
Subject to deductibles and co-pay
150 day limit for hospital care
100days for skilled nursing
Hospice care
Patient pays for first 3 pints of blood
23
Q

Medicare Part B

A

Doctor services
Free preventative care
Depression
Drugs

Excluded:
Dentures and dental care
Eye exams
Immunizations
Prescription drugs
24
Q

Medicare Part D

A

Prescription drugs

Open enrollment is 10/15-12/7 and effective on 1/1

25
Q

HIPPA Election

A

Preexisting conditions not included if transferring between group plans within 63 days

26
Q

Dividend Options

A 
Cash
Reduction of premiums
Accumulated with interest
Paid up additions
One year term
27
Q

Nonforfeiture Options

A

Cash option

Reduced amount - whatever CV will provide - permanent

Extended term: cv keeps policy I force as long as possible

28
Q

Approved 1035

A

Life to life
Annuity to annuity
Life or annuity to LTC

29
Q

Stock Redemption buy-sell (entity purchase)

A

Corporation is owner and beneficiary

Premiums not deductible

DB tax free to company

Gain is larger than cross purchase

30
Q

Cross purchase (stockholder purchase)

A

EE is owner and spouse is beneficiary

Premium not deductible

31
Q

Split dollar - two methods

A

Endorsement method: ER is owner, EE not shareholder, ER receives premiums back and DB balance goes to family

Collateral Assignment: EE is owner, shareholder, family gets DB tax free

32
Q

Health FSA

A

$2650 limit

Not subject to FICA and FUTA

33
Q

Dependent FSA

A

$5k limit per year

If married both spouse must earn income or $5k is taxable

CFP TL VERSION (6 decks)

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