Exam 14: Professional Financial Planning

When an insured dies with an incident of ownership in a life insurance contract:

Explain what a will is. What happens when a person dies without a valid will?

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

In a key-employee insurance purchase, the business should be the owner and the beneficiary of the policy.

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

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

Which of the following statements is false?

The needs-based approach should be used to determine whether life insurance is needed and how much.

The present value of an education fund increases as one gets closer to the college years.

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

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

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

For which year(s) is (are) the Federal Unified Estate Taxes known?

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

Mr. & Mrs. Clinton are in their 80s. They have saved millions of dollars and need to begin taking steps to minimize their estate tax liability. They have asked you for advice, and you tell them, "Give each of your children, grandchildren, and great-grandchildren a cash gift to start spending down your estate." Is this correct?