AFIP Financial Needs Analysis 2

Question 1

A customer has a $250,000 mortgage, $50,000 in consumer debt, and no life insurance. Which financial need should an F&I professional address first?

Accepted Answer

Debt cancellation or credit life coverage

Answer

Debt cancellation or credit life coverage directly addresses the customer's outstanding liabilities and protects their estate from debt burden.

Question 2

When conducting a financial needs analysis, what is the primary purpose of gathering a customer's monthly income information?

Accepted Answer

To assess their ability to afford protection products and identify coverage gaps

Answer

Monthly income data helps evaluate affordability of protection products and reveals gaps between income and financial obligations.

Question 3

A single parent with two dependents purchases a vehicle. Which FNA finding would make credit life insurance most critical for this customer?

Accepted Answer

The customer has no spouse or co-borrower to absorb the debt

Answer

Without a co-borrower, the debt falls solely on the estate or dependents, making credit life insurance especially important for single-parent households.

Question 4

In a financial needs analysis, 'income replacement' refers to:

Accepted Answer

Providing funds to maintain a family's standard of living if the breadwinner dies or becomes disabled

Answer

Income replacement is a core FNA concept ensuring dependents can maintain their lifestyle if the primary earner is no longer able to work.

Question 5

Which of the following best describes an 'exposure' in the context of financial needs analysis?

Accepted Answer

A financial risk or liability the customer has not yet protected against

Answer

An exposure is an unprotected financial risk identified during the FNA that a suitable product can mitigate.

(AFIP) Certified Association of Finance & Insurance Professionals Practice Test

(AFIP) Certified Association of Finance & Insurance Professionals Practice Test

AFIP Financial Needs Analysis 2