Practice Test GeeksFiCEP - Financial Counseling Certification Program Practice Test
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Insurance Planning Flashcards

7 cards from real FICEP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Insurance Planning flashcards as text

  1. A client with a $500,000 whole life policy wants to stop paying premiums but keep some coverage. Which nonforfeiture option provides paid-up coverage for a reduced face amount?

    Answer: Reduced paid-up insurance

    Reduced paid-up insurance uses the cash value to purchase a smaller whole life policy requiring no further premiums.

  2. Which Medicare supplement (Medigap) plan is the only one that covers the Medicare Part B deductible for policies sold after January 1, 2020?

    Answer: Plan G

    After January 1, 2020, Plans F and C were eliminated for new enrollees, making Plan G the most comprehensive available Medigap plan.

  3. A 45-year-old client is considering a variable annuity with a guaranteed minimum income benefit (GMIB). What is the PRIMARY risk this rider is designed to mitigate?

    Answer: Longevity risk combined with poor market performance

    The GMIB guarantees a minimum income stream regardless of account performance, protecting against outliving assets in a down market.

  4. Under the concept of subrogation in insurance, after an insurer pays a claim, the insurer has the right to:

    Answer: Pursue a third party responsible for the loss

    Subrogation allows the insurer to step into the insured's shoes and recover the paid claim amount from the negligent third party.

  5. Which disability income policy provision specifies that the insurer cannot cancel coverage or raise premiums as long as the insured pays premiums on time?

    Answer: Non-cancelable

    Non-cancelable policies lock in both the right to renew and the premium rate, offering the strongest consumer protection available.

  6. A client's homeowners policy has an 80% coinsurance requirement. The home is worth $300,000 but insured for only $180,000. A $90,000 partial loss occurs. How much will the insurer pay (ignoring deductibles)?

    Answer: $67,500

    The coinsurance formula: ($180,000 / $240,000 required) × $90,000 loss = 0.75 × $90,000 = $67,500.

  7. When evaluating a client's need for umbrella liability insurance, which factor is MOST important to consider?

    Answer: Total assets that could be exposed in a lawsuit

    Umbrella insurance protects assets above underlying policy limits, so the primary consideration is how much wealth could be at risk in a judgment.