FFC Insurance and Protection Planning 2

Question 1

An umbrella liability insurance policy is best described as:

Accepted Answer

Excess liability coverage above underlying auto and homeowners limits

Answer

A policy that replaces income during a disability

Answer

A policy bundling life, health, and property coverage

Answer

Coverage specifically for professional errors and omissions

Question 2

Which of the following is a key tax advantage of a Health Savings Account (HSA)?

Accepted Answer

Contributions, growth, and qualified medical withdrawals are all tax-advantaged

Answer

Contributions are taxable but withdrawals for medical expenses are tax-free

Answer

Only employer contributions are tax-deductible

Answer

Funds must be used within the calendar year or are forfeited

Question 3

What does COBRA allow a recently terminated employee to do?

Accepted Answer

Continue their employer-sponsored health coverage for a limited period at their own expense

Answer

Apply for Medicare immediately regardless of age

Answer

Convert their term life policy to permanent coverage

Answer

Receive unemployment benefits for up to 26 weeks

Question 4

What is the primary difference between whole life and universal life insurance?

Accepted Answer

Universal life offers flexible premiums and adjustable death benefits; whole life has fixed premiums and benefits

Answer

Universal life only provides coverage until age 65

Answer

Whole life has no cash value; universal life does

Answer

Universal life premiums are always lower than whole life premiums

Question 5

An annuity contract is primarily used to address which financial planning need?

Accepted Answer

Accumulating and distributing retirement income over a lifetime

Answer

Providing a lump-sum death benefit to heirs

Answer

Covering catastrophic property losses

Answer

Funding a child's college education

Question 6

Property and casualty (P&C) insurance primarily covers which of the following?

Accepted Answer

Damage to property and legal liability for accidents or injuries

Answer

Life insurance and disability income

Answer

Health care expenses and prescription drugs

Answer

Long-term care and custodial services

Question 7

In insurance, 'subrogation' refers to the insurer's right to:

Accepted Answer

Seek reimbursement from a responsible third party after paying a claim

Answer

Cancel a policy for non-payment of premiums

Answer

Increase premiums at renewal without restriction

Answer

Transfer policyholder obligations to another insurer