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CFP Shortcuts > Shortcuts > Flashcards

Shortcuts Flashcards

1
Q

Parts of the Insurance Contract

A

DICE
Declarations & Definitions of key policy terms
Insuring Agreements
Conditions
Exclusions

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2
Q

Perils
(Basic)

A

WHARVES/FLT
Windstorm, hail, aircraft, riot, vandalism, vehicles, explosion, smoke, fire, lightning, theft

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3
Q

Perils
(Broad)

A

RAF
Rupture of a system, artificially generated electricity, falling object, freezing of plumbing

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4
Q

Exclusions on Homeowners Policy

A

OPENWIF
Ordinance of law, power failure, earthquake, neglect&neuclesr hazard
War; intentional loss, flood

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5
Q

Dividend Options (insurance)

A

CRAPO
-cash
-reduced premium
-accumulate with interest
-paid up additions (the side policies forever)
-one year term (5th dividend) (expires)

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6
Q

Nonforfeiture Options (Insurance)

A

CRE
-cash
-reduced paid up (make a smaller policy based on cash value you have added to date)
-extended term (same policy but only good for a stated time)

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7
Q

Transfer for Value Rules

A

I “C” dead people (I C D P)
-individual
-corporation
-divorce
-partnership

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8
Q

1035 Exchange

A

Lindsay Lohan (life to life)
Goes to LA (life to annuity)
For AA (annuity to annuity)
Not AL (Alabama) (NO annuity to Life)

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9
Q

Homeowners Insurance Parts (A-F)

A

A-abode
B-backyard/buildings
C-contents
D-days inn (loss of use)
E-enemies
F-first aid

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10
Q

Auto insurance coverages

A

A-accidents
B-boo boo/bruise
C-careless(uninsured motorist)
D-damage to auto (collision and other than collision)

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11
Q

Risks of Corporate and Municipal Bonds

A

DRIP
D-default risk
R-reinvestment risk
I-interest rate risk
P-purchasing power

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12
Q

Risks of government bonds

A

RIP
R-reinvestment rate risk
I-interest rate risk
P-purchasing power risk

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13
Q

Define an accredited investor

A

1-2-3 test (needs atleast 1)
1 MM net worth (excluding primary residence)
200K annual income for individual
300K annual income for a couple

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14
Q

Systematic Risk

A

PRIME
-purchasing power risk
-reinvestment rate risk
-interest rate risk
-market risk
-exchange rate risk

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15
Q

Duration to manage bond portfolio

A

UPS & FALLEN

If rates are expected to go UP, S-horten (buy bonds with short maturities)

If rates are expected to FALL, L-engthen (buy bonds with long maturities)

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16
Q

Personal Service Corporation (PSC)

A

HALE
Health (doctors,dentist, etc)
Accounting, actor, architect
Law
Engineers

17
Q

Preference Items (AMT)

A

IPOD
I-intangible drilling costs
P-private activity municipal bond
O-oil and gas percentage depletion
D-depreciation (ACRS/MACRS) NOT straight line

18
Q

Keogh contribution limits

A

15%= multiply net schedule c by 12.12
25% =multiply net schedule c by 18.59

CFP Shortcuts (3 decks)

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