Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

PFP 1 > Kory > Flashcards

Kory Flashcards

PFP1

1
Q

What is Pure Risk?

A

It involes only the possibility of loss. Profit is not a possible outcome

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What is Speculative Risk?

A

Either a profit or loss is possible

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is Subjective Risk?

A

Amount of pure risk that is either an invididual or company will assume

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What is Objective Risk?

A

The variance between anticipated losses and actual losses

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What is Loss avoidance?

A

Not exposing ones self to a particular risk (example - Not investing in the market and purchasing GIC’s)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What is Loss prevention?

A

Reducing the frequency of loss while continuing to engage in the activity. (example - A loss of clothes can be prevented if security tags are added to the clothing )

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What is Loss reduction?

A

Aims at reducing the severity of a loss once it has been incurred (example - a risk of loss due to a fire can be reduced if a sprinkler system has been installed.)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What are examples of Allowable Deductions?

A

Contributions to RRSP, RPPs, Professional and union dues, business losses, child care expenses, tax shelter deductions.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What are examples of additional deductions?

A

Stock options and share deductions for employees, loss carryovers (net capital and non capital losses of other years), capital gains deductions

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What are examples of non-refundable tax credits?

A

basic personal amount, CPP contributions, tuition amount

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What is the difference between Tax deduction and a tax credit?

A

Tax Deduction - reduces the taxable income on which federal tax is calculated, therefore reduces tax paid at the marginal tax rate
Tax credit - is a specific reduction of taxes payable and has a value equal to its stated amount, regardless of the taxpayers tax bracket.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What are the three major types of personal Risk?

A

Premature Death - Dying before reaching the average life expectancy. It can result in financial difficulty.
Aging and retirement - Insufficient income during retirement
Heath - Risk of illness or disability, resulting in high medical expenses

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What is the OSFI (Office of Superintendent of Financial Institutions Act)

A

To constant supervision of federally chartered and foreign insurance companies

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What is the Insurance Companies Act?

A
  • It requires companies to maintain assets based on various formulas tied to the type of insurance carried
  • Reserves must be maintained for unearned premiums and claims
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What is the Uniform Life Insurance Act?

A

Sets out provisions required by law to be included in policy contracts

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What does Assuris do?

A

They protect policyholders against loss of benefits due to the financial failure of a member company

17
Q

What is term insurance?

A

Term insurance provides protection against the risk of death for a specified length of time. The protection will terminate at the end of the specified period. Term insurance is usually used to cover a temporary need (debt or mortgage)

18
Q

Term insurance can be available as?

A

Level term- The coverage stays the same throughout the term of the policy
Decreasing term- The coverage decreases over the specified time frame

19
Q

What are the different types of term insurance?

A

Renewable Term- a renewable term contacts allows for the policy to be extended for another term of equal length without providing medical insurability
Convertiable- a term policy that can be converted into a whole life contract
Decreasing term - used for mortgages, coverage decrease as the mortgage balanced decreases
Group Life insruance- Used by companies, coverage is usually directly related to the employees salaries.

20
Q

What is permanent or whole life insurance?

A

It covers clients full lifetime. The coverage and premiums usually stay the same throughout the time the policy is in force

21
Q

What is universal life insurance?

A

It is a type of whole life insurance but offers more flexibility such as periodic reviews and adjustments, flexibility of face amount and premium deposits, and making investment accounts.

22
Q

What is endowment life insurance?

A

It is a combination of term life and whole life. It provides coverage for a specified time (65) and builds cash value. If the client dies before 65, the beneficiary receives the face value of the coverage. If the person lives to 65, the policy owner receives the entire face value of the policy.

23
Q

What are the advantages of term life insurance?

A

Good for short term insurance needs

Inexpensive for younger people in good health

24
Q

What are the disadvantages of term insurance?

A
  • Costs goes up with age
  • Client may become uninsurable with age and could outlive the coverage
  • Coverage provided by group plans will terminate when an employee leaves the company unless can be converted.
  • If converted, the former employee may have to pay a higher premium due to age and health.
25
Q

What is a conventional or formal will?

A

It is a will that is hand written by the testator or third party, and signed by the testator in presence of at least 2 witnesses

26
Q

What are the 4 sequence of events should take place at the recommendation stage

A
  1. Discuss strategies and recommendations with your clients.
  2. Allow your clients to ask questions and express concerns.
  3. Modify and revise your recommendations accordingly.
  4. Discuss the new recommendations with your clients.
27
Q

What is another work for marketability risk?

A

Liquidity risk

28
Q

What is Integrity?

A

Being honest and upright with your clients

29
Q

What is Professionalism?

A

Be competent, knowledgeable and up to date regarding all aspects of the financial services industry.

30
Q

What is Confidentiality?

A

Respect your clients’ privacy and treat their information with confidentiality

31
Q

What is Objectivity?

A

Do not make recommendations that benefit you or your institution when there are other products and services that might better suit your clients.

32
Q

What is Diligence?

A

Investigate products or services before you recommend them and closely supervise others who are involved in the planning process.

33
Q

When does a terminal loss occur?

A

When a smaller capital cost allowance is claimed than the actual depreciation of an asset.

PFP 1 (1 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions