Question 1

Which one of the following is not usually involved in the sale of life insurance on college campuses?

Accepted Answer

A) whole life insurance 
B) free life insurance for the first year 
C) whole life insurance, a small down payment and a loan of the 1st year's premium 
D) selling the applicant on insurability issues 
A) whole life insurance 
B) free life insurance for the first year 
C) whole life insurance, a small down payment and a loan of the 1st year's premium 
D) selling the applicant on insurability issues

Question 2

To properly handle the orderly transfer of business ownership at death,it is necessary to have

Accepted Answer

A) an unfunded buy and sell agreement 
B) a life insurance contract to fund the purchase and a buy and sell agreement 
C) a verbal understanding of the valuation method 
D) a verbal commitment of the heirs to sell the business 
A) an unfunded buy and sell agreement 
B) a life insurance contract to fund the purchase and a buy and sell agreement 
C) a verbal understanding of the valuation method 
D) a verbal commitment of the heirs to sell the business

Question 3

There is never any income tax when an individual surrenders his life insurance contract.

Accepted Answer

A) True 
 B)False

Question 4

The trustee of a trust fund is responsible for determining the beneficiary of the fund's assets.

Accepted Answer

A) True 
 B)False

Question 5

Choose the answer that best describes the purpose of a Section 529 Plan

Accepted Answer

A) funding retirement with tax-deferred dollars 
B) funding retirement with completely tax-free dollars 
C) funding a college education 
D) funding retirement 
A) funding retirement with tax-deferred dollars 
B) funding retirement with completely tax-free dollars 
C) funding a college education 
D) funding retirement

Question 6

"Probate" is best-defined as:

Accepted Answer

A) choosing investments for a trust fund at death 
B) selecting the beneficiary of a trust fund after death of the donor 
C) administration of an estate following death of an individual 
D) supervising the transfer of property at death 
A) choosing investments for a trust fund at death 
B) selecting the beneficiary of a trust fund after death of the donor 
C) administration of an estate following death of an individual 
D) supervising the transfer of property at death

Question 7

For most people the greatest need for life insurance is to retire the debts of the primary wage earner.

Accepted Answer

A) True 
 B)False

Question 8

The maximum estate tax rate is 58

Accepted Answer

A) True 
 B)False

Question 9

Federal Estate Taxes must be paid:

Accepted Answer

A) within 9 months of a persons death 
B) in cash 
C) only on amounts exceeding $600,000 
D) a & b only 
A) within 9 months of a persons death 
B) in cash 
C) only on amounts exceeding $600,000 
D) a & b only

Question 10

Which of the following needs for life insurance would be considered permanent?

Accepted Answer

A) education fund for surviving children 
B) income fund for surviving children 
C) debt-retirement fund 
D) burial fund 
A) education fund for surviving children 
B) income fund for surviving children 
C) debt-retirement fund 
D) burial fund

Question 11

The needs-based approach is one technique for calculating how much life insurance one needs. Explain briefly the method for calculating this amount.

Accepted Answer

To calculate the amount of life insuranc

Question 12

Which of the following is one of the three largest financial problems facing middle income Americans?

Accepted Answer

A) financing a teenager's automobile 
B) financing college 
C) financing the income needs of a surviving spouse with children 
D) financing the early working years 
A) financing a teenager's automobile 
B) financing college 
C) financing the income needs of a surviving spouse with children 
D) financing the early working years

Question 13

A person holding the title of "Certified Financial Planner" must have

Accepted Answer

A) completed a 5-course program 
B) passed a certification examination 
C) spent 5 years in the business of financial planning 
D) a & b above 
A) completed a 5-course program 
B) passed a certification examination 
C) spent 5 years in the business of financial planning 
D) a & b above

Question 14

All of the following are typical business uses of life insurance except:

Accepted Answer

A) protect the business against loss caused by the death of a key person 
B) provide a means of rewarding and retaining valuable employees 
C) provide severance pay to employees when jobs are terminated 
D) protect the value of the partnership at the death of an owner/insured 
A) protect the business against loss caused by the death of a key person 
B) provide a means of rewarding and retaining valuable employees 
C) provide severance pay to employees when jobs are terminated 
D) protect the value of the partnership at the death of an owner/insured

Question 15

Financing retirement is a challenge for many Americans. Which of the following is not a reason that retirement planning has become more challenging?

Accepted Answer

A) many employers no longer fund retirement programs for their employees 
B) many employees have complicated but generous health insurance plans provided by their employer 
C) Social Security has increased the normal retirement age and lowered benefit targets 
D) Increases in longevity put a greater burden on retirement savings 
A) many employers no longer fund retirement programs for their employees 
B) many employees have complicated but generous health insurance plans provided by their employer 
C) Social Security has increased the normal retirement age and lowered benefit targets 
D) Increases in longevity put a greater burden on retirement savings

Question 16

When a person dies,the gross estate is

Accepted Answer

A) taxed at the rate of 50% 
B) taxed only if made up of real property valued at more than $250,000 
C) subject to the federal estate and gift tax 
D) not taxed if death bed gifts are made to eligible children 
A) taxed at the rate of 50% 
B) taxed only if made up of real property valued at more than $250,000 
C) subject to the federal estate and gift tax 
D) not taxed if death bed gifts are made to eligible children

Question 17

The maximum gift a person can give to someone without incurring gift tax liability is $15,000.

Accepted Answer

A) True 
 B)False

Question 18

Life insurance policy owners have several ways by which to access the cash savings in their life insurance policies while the insured is still alive. Which of the following is not one of those ways?

Accepted Answer

A) invest cash value in the insurer's stock and then receive shareholder dividends 
B) participating policy dividends 
C) withdraw the cash value 
D) take a lump sum settlement if the insured is terminally ill 
A) invest cash value in the insurer's stock and then receive shareholder dividends 
B) participating policy dividends 
C) withdraw the cash value 
D) take a lump sum settlement if the insured is terminally ill

Question 19

Why is it necessary to buy life insurance on a non-wage earning spouse?

Accepted Answer

A non
wage earning spouse can contribute

Question 20

Which of the following statements is false?

Accepted Answer

A) People with a small amount of assets do not typically need a will 
B) A parent can use a will to appoint a guardian for his/her children 
C) A valid will can minimize probate problems 
D) A legally-enforceable will must be made when a person is of sound mine 
A) People with a small amount of assets do not typically need a will 
B) A parent can use a will to appoint a guardian for his/her children 
C) A valid will can minimize probate problems 
D) A legally-enforceable will must be made when a person is of sound mine

Exam 12: Professional Financial Planning

Which one of the following is not usually involved in the sale of life insurance on college campuses?

To properly handle the orderly transfer of business ownership at death,it is necessary to have

There is never any income tax when an individual surrenders his life insurance contract.

The trustee of a trust fund is responsible for determining the beneficiary of the fund's assets.

Choose the answer that best describes the purpose of a Section 529 Plan

"Probate" is best-defined as:

For most people the greatest need for life insurance is to retire the debts of the primary wage earner.

The maximum estate tax rate is 58

Federal Estate Taxes must be paid:

Which of the following needs for life insurance would be considered permanent?

The needs-based approach is one technique for calculating how much life insurance one needs. Explain briefly the method for calculating this amount.

Which of the following is one of the three largest financial problems facing middle income Americans?

A person holding the title of "Certified Financial Planner" must have

All of the following are typical business uses of life insurance except:

Financing retirement is a challenge for many Americans. Which of the following is not a reason that retirement planning has become more challenging?

When a person dies,the gross estate is

The maximum gift a person can give to someone without incurring gift tax liability is $15,000.

Life insurance policy owners have several ways by which to access the cash savings in their life insurance policies while the insured is still alive. Which of the following is not one of those ways?

Why is it necessary to buy life insurance on a non-wage earning spouse?

Which of the following statements is false?

Fundamentals and Terminology

Defining the Insurable Event

Risk Management

Financial Services Companies

Insurance Occupations

the Insurance Market: the Economic Problem

Insurance Regulation

Insurance Contracts

Basic Property and Liability Insurance Contracts

Homeowners Insurance

the Personal Auto Policy

Life Insurance Policies

Standard Life Insurance Contract Provisions And Options

Annuities

Medical Expense and Disability Insurance

Advanced Topics in Risk Management

Commercial Property Insurance

Commercial Liability Insurance

Bonding,Crime Insurance and Reinsurance

Employee Benefits

Social Security

Unemployment and Workers Compensation Insurance

Filters