Brainscape's Knowledge GenomeTM

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


See full index

2018 CFP > Risk Management, Insurance, and Employee Benefits > Flashcards

Risk Management, Insurance, and Employee Benefits Flashcards

You may prefer our related Brainscape-certified flashcards:
CFP® flashcards
1
Q

Peril is the cause of a ______

A

financial loss

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

Hazard is a condition that _____

A

increases the prob that a loss will occur

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

Static risks are losses that are caused by factors other than the _____

A

economy

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

Dynamic risks are the result of the ____ changing

A

economy

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

Speculative risk involves both the chance of ______ and ____ and is uninsurable

A

loss or gain (gambling)

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

Risk management process has six steps:

A
  1. determine objectives
  2. id risks
  3. evaluate risks as to their probability and potential loss
  4. determine alternatives to manage risk and select best option
  5. implement program
  6. monitor and evaluate
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Insurance seeks to avoid adverse selection, which means that ____

A

the people with the highest risk are the ones who buy the most insurance

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

A tort can result in two forms of injury:

A

bodily and property damage

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

For life insurance policies, the insured may ______ the policy but must inform the insurer in writing

A

may assign all aspects of the policy

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

Decreasing term insurance is usually used to protect your _____

A

mortgage

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

Between limited pay whole life and modified whole life, which has the lower initial premium payments?

A

modified whole life

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

Universal life has a ____ premium, an _____ death benefit, and _______ life insurance contract

A

flexible premium, adjustable death bene, and unbundled life insurance contract

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

Life insurance programming is used to determine _____

A

the amount of life insurance needed

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

THe capital retention method of life insurance analysis is based on the amount of money needed for continued ________ and does not consider ______

A

continued support of the family and does not consider inflation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

The human life value method of insurance analysis projects the _____ of the individual then uses a ____- to get the present value

A

projects income to get present value

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

The financial needs insurance analysis method examines all ____- expenses to the dependent survivors and any _____ expenditures

A

recurring expenses and unusual expenditures related to the death of the insured

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

The risk of superannuation is the risk of _____

A

running out of money within ones life

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

A QLAC is a qualified longevity annuity that ensures that a retiree has a _____ throughout their advanced years

A

regular income stream

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

For life insurance, dividends are generally considered ______ which reduced the ____

A

return of premiums which reduces the basis

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Withdrawals or loans from MECs receive what kind of accounting treatment?

A

LIFO

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Can you 1035 a MEC into another kind of insurance policy?

A

NO - once a MEC, always a MEC

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

The fixed annuity exclusion ratio =

A

investment in the contract / expected return

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

The variable annuity exclusion ratio =

A

investment in contract / annuitants life

24
Q

For any amount of group term above _____, the schedule premiums above $1,000 per the IRS table is included in W2 wages less employee contributions

A

above $50k

25
Q

Split dollar life insurance is when an ___ and an ____ share the cost

A

employer and employee - good for executives, preretirement death benefiit is objective, selective executive benefits, finance of stock buyout

26
Q

Does an employer receive a deduction for split dollar premium payments?

A

NO

27
Q

For life insurance in a qualified plan, the coverage cannot exceed _____ the expected monthly benefit

A

100x

28
Q

Nonqualified deferred compensation plans are useful when an employer wants to ___, ____, ____. or ____ employees

A

recruit, retain, reward or retire (FOUR Rs)

29
Q

Nonqualified deferred comp plans are advantageous in part because they can favor_______

A

favor executives or a group of employees

30
Q

Disadvantages of nonqual def comp plans is that employers generally cannot ______

A

deduct for contributions

31
Q

Are most nonqual def comp plans funded or nonfunded?

A

NONfunded because of the tax implications

32
Q

A rabbi trust holds property that funds a ___________

A

nonqual def comp plan

33
Q

SERPs are useful over a defined benefit plan because there is no _____

A

benefit limit ($220k for 2018)

34
Q

NQSOs are taxed as ____ at exercise as the difference between the ___ and the ____

A

taxed as ordinary income, difference between exercise price and FMV

35
Q

Basis for NQSOs after exercise is the _____

A

FMV at exercise

36
Q

An 83(b) election can only be made for _____ and allows them to recognize the income immediately rather than waiting until there is no longer a substantial risk of forfeiture

A

restricted stock

37
Q

A cafeteria plan is one in which employees may choose the form of their _____

A

employee benefits

38
Q

Meals and lodging provided by an employer are not includable in gross income provided that two conditions are met:

A
  • meals furnished by employer, on employer premises, and for employers convenience
  • employee required to accept the lodging as a condition of employment
39
Q

A VEBA is a trust or corporation set up to hold funds to pay for _____ under an employee benefit plan

A

hold funds to pay for future benefits (Voluntary Employees Beneficiary Association)

40
Q

The policy elements of disability insurance are:

A
  • definition of disability
  • elimination period
  • benefit amount/%
  • benefit term
  • coverage (perils insured against)
41
Q

For an individual, health insurance premiums receive beneficial tax treatment only if all medical expenditures exceed _____ of AGI

A

10%

42
Q

An HRA is a ______ between an employer and employee

A

health reimbursement arrangement

43
Q

Medicare part A covers _____

A

hospital care, skilled nursing, hospice, and home health

44
Q

Medicare part B is optional and covers ______

A

physicians fees and outpatient services

45
Q

Medicare part C is the medicare ____ plans and allows individuals to choose _____ to parts A & B

A

medicare advantage plans and allows individuals to choose alternatives to parts A&B

46
Q

Medicare part D is ______

A

prescription drug coverage

47
Q

Assets that are not included in determining medicaid coverage are

A

primary residence
personal property and household belongings
one motor vehicle
life insurance with face value less than $1.5k
up to $1.5k in burial funds
assets held in specific trusts

48
Q

The actual cash value for homeowners insurance =

A

replacement cost - depreciation

49
Q

The eight general exclusions for perils for homeowners policies are:

A 
ordinance of law
earth movement
water damage
power failure
neglect
war
nuclear hazard
intentional  loss
50
Q

HO-1 policies cover ____ perils

A

12

51
Q

HO-2 policies cover _____ perils

A

18

52
Q

HO-3 policies cover _____ perils

A

open perils - except for those that are excluded

53
Q

HO-4 is designed for _____

A

renters

54
Q

HO-5 is like HO-3 in terms of the building but covers _____ on an open perils basis (HO-3 covers this on a broad perils basis)

A

personal property

55
Q

HO-6 is for _____

A

condo owners

56
Q

HO-8 is for _____ homes

A

old

57
Q

A commercial package policy (CPP) is a policy to cover ______

A

business property

2018 CFP (10 decks)

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