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CFP /
/Practice /
/Exam //Questions //With //Correct //Answers
What /
/is /
/the /
/minimum /
/for /
/the /
/deductible /
/on //a //high //deductible //plan //for //an //individual //and //a //family? //- //verified //answer(s)-
✔✔ At //least //$1,200 //for //an //individual //and //$2,400 //for //a //family
Which /
/of /
/the /
/following /
/refers /
/to //the //process //of //evaluating //and //classifying //the //risk //level //of //applicants //for //insurance?
A)
Underwriting
B)
Actuarial //science
C)
Adverse //selection
D)
Utilization //review //- //verified //answer(s)- ✔✔ A)
Underwriting
Choose /
/the /
/method /
/of //risk //management //that //is //implemented //by //a //homeowner //who //installs //storm //shutters.
A)
Reduction
B)
Retention
C)
Transfer
D)
Avoidance //- //verified //answer(s)- ✔✔ A)
Reduction
You /
/have //
a /
/meeting //with //Oscar, //age //26, //and //his //wife //Judith, //age //25, //this //afternoon //to //review //their
//risk /
/management /
/plan. /
/They /
/have /
/two //children, //two //cars, //a //home, //and //a //boat. //Oscar //works //at //the //local //bank, //and //Judith
//works /
/car /
/accident /
/could /
/lead /
/to /
/an /
/unlimited //amount //of //liability //depending //on //the //circumstances, //as //well //as //the //possibility
//of /
/negligence /
/occurring /
/on /
/their /
/property. /
/There /
/is //
a /
/higher /
/probability /
/of /
/becoming /
/disabled /
/than /
/of /
/experiencing /
/premature /
/death /
/at /
/their //ages, //and //it //is //much //more //important //to //have //liability //insurance //on //a //vehicle //than
//collision /
/coverage. /
/Liability /
/claims /
/may /
/be /
/much /
/higher /
/than /
/any /
/type /
/of /
/collision //damage //to //a //vehicle. //Both //Oscar //and //Judith //are //too //young //to //consider //long-
term //care //insurance //at //this //time.
Preston //called //Joanna, //an //insurance //broker, //to //obtain //coverage //on //his //30-
foot /
/sailboat. /
/Joanna /
/told /
/him /
/to /
/send /
/in //
a /
/binder /
/premium /
/of /
/She /
/told /
/him /
/that /
/by /
/doing /
/so, /
/he /
/would /
/be /
/covered /
/and /
/that /
/he /
/should /
/go /
/ahead /
/and /
/Corp. /
/will //have //to //pay //the //damages //since //it //did //not //notify //Preston //that //he //was //not //covered.
B)
Boater's //will //have //to //pay //since //Joanna //collected //a //premium //from //Preston.
C)
Preston /
/will /
/have /
/to //pay //because //no //insurance //policy //is //in //force //until //the //insurance //company //accepts //the
//risk.
D)
Joanna //is //respo //- //verified //answer(s)- ✔✔ D)
Joanna /
/is /
/responsible /
/because, /
/as //
a /
/broker, /
/she /
/personally /
/bound //coverage //for //Preston //but //was //unable //to //place //the //coverage //before //the //accident.
Joanna /
/will /
/have /
/to /
/pay /
/because, /
/as //
a /
/broker, /
/she /
/personally /
/bound /
/coverage /
/for /
/Preston /
/but /
/was /
/unable /
/to /
/place /
/the /
/coverage /
/before /
/the /
/accident. /
/Boater's /
/Insurance /
/Corp. /
/was /
/never //
a /
/party /
/to //an //insurance //contract //with //Preston. //Since //Joanna //is //a //broker, //her //actions //only //speak
//for //herself. //There //is //no //insurance //coverage //in //force. //Preston //will //need //to //make //a //claim
//against /
/Joanna, /
/which /
/will /
/likely /
/be //reviewed //by //her //Errors //and //Omissions //carrier. //If //Preston //sues //and //wins, //Joanna //also
//could //be //held //personally //liable.
Which //of //the //following //are //duties //of //the //courts //in //regulating //insurers?
To //render //decisions //on //the //meaning //of //policy //terms
To //enact //laws //that //govern //the //conduct //of //insurers
/the /
/constitutionality /
/of /
/insurance /
/laws. /
/The /
/state /
/legislature /
/completes /
/the /
/remaining /
/two /
/duties: /
/enacts /
/laws /
/and /
/may /
/establish //requirements //that //an //insurer //must //meet //to //obtain //a //license //to //do //business //in
//that //state.
The //insurance //industry //is //regulated //primarily //by
A)
the //federal //government.
B)
the //Supreme //Court.
C)
the //National //Association //of //Insurance //Commissioners //(NAIC).
D)
the //individual //states. //- //verified //answer(s)- ✔✔ D)
the //individual //states.
The //answer //is //the //individual //states. //Under //the //McCarran-
Ferguson /
/Act /
/of /
/insurance /
/is /
/regulated /
/primarily /
/at /
/the /
/state /
/level. /
/The /
/NAIC /
/issues /
/model /
/insurance /
/legislation /
/that /
/the /
/individual /
/states /
/are /
/free //to //adopt //if //they //choose, //but //the //NAIC //has //no //legislative //authority //in //any //state.
Which /
/one //of //the //following //is //the //correct //definition //of //a //term //related //to //risk //management?
A)
Risk: //something //that //causes //a //loss
B)
Moral //hazard: //something //that //increases //the //likelihood //of //risk //due //to //indifference
C)
/Because /
/the /
/silverware /
/cost /
/nearly /
/per /
/place /
/setting, /
/they /
/wanted /
/to /
/make /
/sure /
/it /
/was /
/adequately /
/insured. /
/The /
/couple /
/called /
/Jerry, /
/an //agent //with //Forest //Insurance //Co., //and //asked //him //what //needed //to //be //done //to //ensure
//that /
/they /
/had /
/adequate /
/insurance /
/coverage. /
/Jerry /
/assured /
/them //that //because //they //had //less //than // 10 //place //settings, //they //were //adequately //insured.
If /
/the /
/silverware /
/is /
/stolen, /
/which /
/one /
/of //the //following //legal //remedies //will //most //likely //be //used //to //assure //the //loss //is //covered?
A)
Rescission
B)
Last //clear //chance
C)
Waiver //doctrine
D)
Doctrine //of //estoppel //- //verified //answer(s)- ✔✔ D)
Doctrine //of //estoppel
Jerry, //representing //Forest //Insurance //Co., //made //a //statement //on //which //Carmen //and //David
//relied. /
/This /
/represents /
/the /
/doctrine /
/of /
/estoppel. /
/The /
/insurance /
/company /
/cannot /
/later //state //that //the //agent //made //a //mistake //and //deny //the //claim. //Waiver //doctrine //is //used
//in /
/the /
/instance //where, //if //the //insurance //company //failed //to //exert //its //right //to //deny //one //claim, //it
//may /
A)
Competent //parties
B)
Legal //form
C)
Legal //object
D)
Consideration //- //verified //answer(s)- ✔✔ C)
Legal //object
No /
/contract /
/that //involves //illegal //activity //is //enforceable. //Both //parties //are //at //least //age // 24 //and //can //be
//presumed /
/to /
/be //"competent." /
/The /
/was /
/the /
/consideration /
/for /
/the /
/performance /
/of /
/the /
/slashing. /
/An /
/oral //contract //is //a //legal //form //for //some //contracts. //Bill //made //an //offer //and //Jim //accepted.
Which //one //of //the //following //phrases //describes //an //unintentional //tort?
A)
A //criminal //act
B)
A //libelous //attack
C)
A //civil, //negligent //wrong
D)
An //act //of //vengeance //- //verified //answer(s)- ✔✔ C)
A //civil, //negligent //wrong
William /
/had /
/an /
/interior //water //pipe //break, //and //water //poured //into //his //basement. //Which //of //the //following
//statements /
/accurately //reflect //what //may //occur //or //be //required //of //William //subsequent //to //this //break?
William /
/should /
/turn /
/off /
/the /
/water /
/and //attempt //to //prevent //any //further //damage //immediately //upon //discovering //the //leak.
The /
/insurance /
/company //likely //will //ask //for //an //inventory //of //damaged //items, //and //William //is //obligated //to
//provide //it //if //he //wants //the //claim //paid.
William /
/can /
/throw /
/away /
/any /
/leak /
/is /
/under /
/control, /
/he /
/should /
/call /
/his /
/agent /
/or /
/his /
/insurer's /
/claims /
/office /
/to /
/notify /
/the /
/insurance /
/company /
/of /
/the /
/loss. /
/The /
/insurance /
/company /
/has /
/the /
/right /
/to /
/ask /
/for /
/evidence /
/of /
/the /
/loss. /
/The /
/insurer /
/retains /
/the /
/right /
/to /
/determine /
/what /
/evidence /
/is /
/required, /
/and //the //insured //is //obligated //to //provide //whatever //is //available //or //run //the //risk //of //voiding
//the //policy.
Which /
/of /
/the //following //are //primary //criteria //that //should //be //considered //when //selecting //an //insurer?
A //favorable //rating //from //several //rating //companies
The //number //of //agents //employed
High //persistency //rate
The /
/fact //it //is //not //on //the //National //Association //of //Insurance //Commissioners' //(NAIC) //Watchlist
A)
I //and //II
B)
I, //III, //and //IV
C)
I, //II, //III, //and //IV
D)
III //and //IV //- //verified //answer(s)- ✔✔ B)
I, //III, //and //IV
