FICEP EXAM Questions with 100%
Correct Answers
Select the statement that correctly describes a progressive tax. Correct Answer:
A progressive tax requires people to pay more as they earn more.
What is the name of the organization that offers free tax assistance to taxpayers
age 60 or older, those with disabilities or special needs, or who qualify for
earned income or homestead tax credits? Correct Answer: Tax Counseling for
the Elderly (TCE)
What percent of tax payers are eligible to use the "Free File Online" service
offered as a partnership between the IRS and tax software companies? Correct
Answer: 70% are eligible
When members use tax refunds to pay down debts, which debts should be paid
first? Correct Answer: Always pay the debts with high interest rates or that could
prompt garnishments.
Which type of qualified IRA withdrawal is exempt from income tax? Correct
Answer: Roth IRA withdrawals are exempt.
Which group of taxpayers usually qualifies for the Earned Income Tax Credit
(EITC)? Correct Answer: Low-income families with earned income qualify for the
credit.
These six expenses are typically accepted by the IRS as itemized deductions:
Correct Answer: Traditional IRA contributions, alimony payments, real estate
taxes paid, state and local income taxes, mortgage interest, and casualty and
theft losses.
, What is the meaning of the insurance practice "pooling of risks"? Correct
Answer: Combining risks among insurers as well as groups of individuals.
How did the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985
impact employee health benefits? Correct Answer: It gave employees the right
to retain health insurance after their job ends by paying the full premium.
Under standard property insurance plans, how much of the cost of replacing
property is typically covered? Correct Answer: 80%
Which statement best defines comprehensive and collision insurance coverage
for vehicles? Correct Answer: Collision is for accidents and comprehensive is for
other forms of damage and theft.
What type of protection is provided by an umbrella liability policy? Correct
Answer: It protects homeowners and vehicle owners from lawsuits.
Which statement accurately describes features of term insurance and whole life
insurance? Correct Answer: Whole life policies build cash value and policy
settlement options.
Why should a member never simply drop a whole life insurance policy? Correct
Answer: Whole life policies usually have cash value, or surrender options.
What is the "rule of 72" used to determine? Correct Answer: The number of years
required to double the investment: 72 divided by the current interest rate.
What is the rate of return? Correct Answer: The percentage gain in value on
your investment.
If you drop your thermostat by one degree, how much will it cut your heating
costs? Correct Answer: 3%
Correct Answers
Select the statement that correctly describes a progressive tax. Correct Answer:
A progressive tax requires people to pay more as they earn more.
What is the name of the organization that offers free tax assistance to taxpayers
age 60 or older, those with disabilities or special needs, or who qualify for
earned income or homestead tax credits? Correct Answer: Tax Counseling for
the Elderly (TCE)
What percent of tax payers are eligible to use the "Free File Online" service
offered as a partnership between the IRS and tax software companies? Correct
Answer: 70% are eligible
When members use tax refunds to pay down debts, which debts should be paid
first? Correct Answer: Always pay the debts with high interest rates or that could
prompt garnishments.
Which type of qualified IRA withdrawal is exempt from income tax? Correct
Answer: Roth IRA withdrawals are exempt.
Which group of taxpayers usually qualifies for the Earned Income Tax Credit
(EITC)? Correct Answer: Low-income families with earned income qualify for the
credit.
These six expenses are typically accepted by the IRS as itemized deductions:
Correct Answer: Traditional IRA contributions, alimony payments, real estate
taxes paid, state and local income taxes, mortgage interest, and casualty and
theft losses.
, What is the meaning of the insurance practice "pooling of risks"? Correct
Answer: Combining risks among insurers as well as groups of individuals.
How did the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985
impact employee health benefits? Correct Answer: It gave employees the right
to retain health insurance after their job ends by paying the full premium.
Under standard property insurance plans, how much of the cost of replacing
property is typically covered? Correct Answer: 80%
Which statement best defines comprehensive and collision insurance coverage
for vehicles? Correct Answer: Collision is for accidents and comprehensive is for
other forms of damage and theft.
What type of protection is provided by an umbrella liability policy? Correct
Answer: It protects homeowners and vehicle owners from lawsuits.
Which statement accurately describes features of term insurance and whole life
insurance? Correct Answer: Whole life policies build cash value and policy
settlement options.
Why should a member never simply drop a whole life insurance policy? Correct
Answer: Whole life policies usually have cash value, or surrender options.
What is the "rule of 72" used to determine? Correct Answer: The number of years
required to double the investment: 72 divided by the current interest rate.
What is the rate of return? Correct Answer: The percentage gain in value on
your investment.
If you drop your thermostat by one degree, how much will it cut your heating
costs? Correct Answer: 3%
