FPQP Exam (Paraplanning 2) Prep Exam
and All Correct Answers 2026-2027
Edition.
Under the coinsurance provision in a medical insurance policy the insured is required to pay -
Answer a percentage of the covered loss up to a stated amount.
Which of the following statements regarding the elimination period of a disability insurance
policy is CORRECT? - Answer All else being equal, the longer the elimination period, the lower
the premium.
Which of the following situations would be best suited for a decreasing term insurance policy (a
policy that provides a lower death benefit each passing year)? - Answer A single homeowner
with no dependents
Which of the following elements is NOT considered in the process of determining the cost of a
life insurance premium? - Answer Morbidity charges
Which of these statements regarding life insurance dividends is CORRECT? - Answer Dividends
may be used to reduce premium payments, thus maintaining insurance coverage and reducing
out-of-pocket expenses.
What typically occurs if an irrevocable beneficiary passes away before the insured? - Answer
Policy rights revert to the owner
Which of these is a characteristic of the Affordable Care Act (ACA)? - Answer There are market
exchanges for comparison and choice of plans.
Which of the following is the most important factor to consider when acquiring life insurance? -
Answer Insurance need
When purchasing disability insurance, which of the following is the least restrictive definition of
disability, from the perspective of the insured? - Answer Unable to perform own occupation
Which of the following statements about deferred variable annuities is CORRECT? - Answer
Variable annuities offer no guarantee as to the account value, except at death.
,What is the maximum amount of group term life insurance coverage an employer can provide
on the life of an employee without income tax consequences to the employee? - Answer
$50,000
Which of these is a difference between term life and whole life insurance? - Answer Whole life
has an element of savings; term life does not.
Which of these life insurance policies allows for flexibility in both the premium amount and the
death benefit amount? - Answer Universal life
Which of these statements regarding variable life insurance or traditional whole life insurance is
CORRECT? - Answer Variable life insurance policies shift the investment risk to the
policyholder.
Which of the following activities of daily living (ADLs) would NOT be listed in a long-term care
(LTC) insurance policy? - Answer Driving
Which of the following statements about long-term disability (LTD) policies is CORRECT? -
Answer If premiums for an LTD policy are paid by the insured with after-tax dollars, then any
benefit from the policy would be received tax free.
George has a $125,000 whole life policy, with his wife Betty as the sole beneficiary. The cash
value of the policy is $35,000, and George has an outstanding policy loan of $12,000. George
died in a hunting accident, and Betty has asked how much she will collect from the policy. What
is the life insurance death benefit payable to Betty? - Answer 113,000
Which of these statements regarding traditional whole life insurance is CORRECT? - Answer
Loans may be taken from the policy cash value.
The income-based (human life) method of calculating the necessary amount of life insurance
coverage - Answer puts a value on replacing economic worth—the amount of earning power
that would be lost.
Which of the following are possible financial considerations used to determine required life
insurance through the needs-based method?
Burial expenses
Readjustment period income
Charitable bequest
Retirement needs for surviving spouse - Answer I, II, and IV
,Your clients are considering which type of health insurance policy would be best for their family.
They are most concerned about how much they would potentially be liable for if a catastrophic
event were to occur. You would advise them that the amount they should consider most is -
Answer the maximum out-of-pocket (MOOP).
Which of the following describes the time when there must be an insurable interest for a life
insurance policy? - Answer When the policy is purchased
Assume your client, Stephanie, age 50, takes a distribution of her Roth IRA assets six tax years
after she funded her account. Which of the following distributions will be income tax free and
free from the 10% early withdrawal penalty? - Answer A distribution due to a disability
Under the Affordable Care Act, all plans in the marketplace must offer the same set of essential
health benefits, which includes all of the following except - Answer long-term care.
Alex, Megan, and their child, Joey, have a health care plan that includes
a $4,000 individual deductible;
80% coinsurance percentage, after the deductible is met; and
a MOOP limit of $12,900.
If Alex has a sudden illness and must be hospitalized for five days at a total cost of $50,000, how
much will Alex have to pay for this illness? Use the information provided above. - Answer Alex
must pay $12,900; the insurance company will pay $37,100.
Which of the following are payout options offered by fixed annuities?
Life income option
Period certain option
Fixed amount payments
Life option with refund - Answer I, II, III, and IV
Which of these statements regarding Health Savings Accounts (HSAs) is CORRECT? - Answer
An individual must have a high deductible health care plan in order to fund an HSA.
For the rest of his life, Thomas wants to receive an income stream that does not vary. He has a
lump sum to fund such an annuity and wants the income payments to start as soon as possible.
Which of the following annuities should he consider? - Answer Fixed immediate
Which of these statements about life insurance is CORRECT? - Answer Policyholders can
generally borrow up to 90% of the cash value of a policy.
, Pedro has a major medical policy with a $500 deductible and an 80% coinsurance clause, and a
maximum out of pocket (MOOP) of $6,500. Assuming Pedro has recently incurred a medical
expense of $10,000, what is his out-of-pocket expense? - Answer Answer is $2,400
$10,000 - $500 deductible = $9,500
$9,500 x 0.20 = $1,900 coinsurance
$500 deductible + $1,900 coinsurance = $2,400
A client is seeking guidance in all areas of financial planning. Which of the following most closely
describes the type of financial planning the client wants? - Answer Comprehensive planning
A planner who addresses only the purchase of a first home for a client is practicing - Answer
targeted financial planning.
Kiara has accumulated $10,000 in a savings account over the last few years and has earmarked
that money as a down payment on a luxury boat. Her central air conditioner breaks and
requires $5,000 in repairs. Kiara is reluctant to spend the money in her savings account to make
the repairs because she wants to use that money for the boat down payment. Instead, she puts
the $5,000 repair charge on her credit card at an annual interest rate of 23%. This is an example
of which of these behaviors? - Answer Mental accounting
Which of the following is a characteristic of properly stated financial goals? - Answer Definite
When helping clients identify goals, financial planners should practice active listening skills by
engaging in all of these except - Answer offering suggestions for goals.
Which of the following financial goals is written correctly? - Answer To accumulate $40,000 in
seven years for a down payment on a house
During which of the following steps in the financial planning process is the current yield from
already-invested assets first identified? - Answer Understanding the client's personal and
financial circumstances
Asset categories that are appropriate for the client are determined during which of the
following steps of the financial planning process? - Answer Developing the financial planning
recommendations
During which of the following steps of the financial planning process is the performance of a
client's investments reviewed periodically? - Answer Monitoring progress and updating
and All Correct Answers 2026-2027
Edition.
Under the coinsurance provision in a medical insurance policy the insured is required to pay -
Answer a percentage of the covered loss up to a stated amount.
Which of the following statements regarding the elimination period of a disability insurance
policy is CORRECT? - Answer All else being equal, the longer the elimination period, the lower
the premium.
Which of the following situations would be best suited for a decreasing term insurance policy (a
policy that provides a lower death benefit each passing year)? - Answer A single homeowner
with no dependents
Which of the following elements is NOT considered in the process of determining the cost of a
life insurance premium? - Answer Morbidity charges
Which of these statements regarding life insurance dividends is CORRECT? - Answer Dividends
may be used to reduce premium payments, thus maintaining insurance coverage and reducing
out-of-pocket expenses.
What typically occurs if an irrevocable beneficiary passes away before the insured? - Answer
Policy rights revert to the owner
Which of these is a characteristic of the Affordable Care Act (ACA)? - Answer There are market
exchanges for comparison and choice of plans.
Which of the following is the most important factor to consider when acquiring life insurance? -
Answer Insurance need
When purchasing disability insurance, which of the following is the least restrictive definition of
disability, from the perspective of the insured? - Answer Unable to perform own occupation
Which of the following statements about deferred variable annuities is CORRECT? - Answer
Variable annuities offer no guarantee as to the account value, except at death.
,What is the maximum amount of group term life insurance coverage an employer can provide
on the life of an employee without income tax consequences to the employee? - Answer
$50,000
Which of these is a difference between term life and whole life insurance? - Answer Whole life
has an element of savings; term life does not.
Which of these life insurance policies allows for flexibility in both the premium amount and the
death benefit amount? - Answer Universal life
Which of these statements regarding variable life insurance or traditional whole life insurance is
CORRECT? - Answer Variable life insurance policies shift the investment risk to the
policyholder.
Which of the following activities of daily living (ADLs) would NOT be listed in a long-term care
(LTC) insurance policy? - Answer Driving
Which of the following statements about long-term disability (LTD) policies is CORRECT? -
Answer If premiums for an LTD policy are paid by the insured with after-tax dollars, then any
benefit from the policy would be received tax free.
George has a $125,000 whole life policy, with his wife Betty as the sole beneficiary. The cash
value of the policy is $35,000, and George has an outstanding policy loan of $12,000. George
died in a hunting accident, and Betty has asked how much she will collect from the policy. What
is the life insurance death benefit payable to Betty? - Answer 113,000
Which of these statements regarding traditional whole life insurance is CORRECT? - Answer
Loans may be taken from the policy cash value.
The income-based (human life) method of calculating the necessary amount of life insurance
coverage - Answer puts a value on replacing economic worth—the amount of earning power
that would be lost.
Which of the following are possible financial considerations used to determine required life
insurance through the needs-based method?
Burial expenses
Readjustment period income
Charitable bequest
Retirement needs for surviving spouse - Answer I, II, and IV
,Your clients are considering which type of health insurance policy would be best for their family.
They are most concerned about how much they would potentially be liable for if a catastrophic
event were to occur. You would advise them that the amount they should consider most is -
Answer the maximum out-of-pocket (MOOP).
Which of the following describes the time when there must be an insurable interest for a life
insurance policy? - Answer When the policy is purchased
Assume your client, Stephanie, age 50, takes a distribution of her Roth IRA assets six tax years
after she funded her account. Which of the following distributions will be income tax free and
free from the 10% early withdrawal penalty? - Answer A distribution due to a disability
Under the Affordable Care Act, all plans in the marketplace must offer the same set of essential
health benefits, which includes all of the following except - Answer long-term care.
Alex, Megan, and their child, Joey, have a health care plan that includes
a $4,000 individual deductible;
80% coinsurance percentage, after the deductible is met; and
a MOOP limit of $12,900.
If Alex has a sudden illness and must be hospitalized for five days at a total cost of $50,000, how
much will Alex have to pay for this illness? Use the information provided above. - Answer Alex
must pay $12,900; the insurance company will pay $37,100.
Which of the following are payout options offered by fixed annuities?
Life income option
Period certain option
Fixed amount payments
Life option with refund - Answer I, II, III, and IV
Which of these statements regarding Health Savings Accounts (HSAs) is CORRECT? - Answer
An individual must have a high deductible health care plan in order to fund an HSA.
For the rest of his life, Thomas wants to receive an income stream that does not vary. He has a
lump sum to fund such an annuity and wants the income payments to start as soon as possible.
Which of the following annuities should he consider? - Answer Fixed immediate
Which of these statements about life insurance is CORRECT? - Answer Policyholders can
generally borrow up to 90% of the cash value of a policy.
, Pedro has a major medical policy with a $500 deductible and an 80% coinsurance clause, and a
maximum out of pocket (MOOP) of $6,500. Assuming Pedro has recently incurred a medical
expense of $10,000, what is his out-of-pocket expense? - Answer Answer is $2,400
$10,000 - $500 deductible = $9,500
$9,500 x 0.20 = $1,900 coinsurance
$500 deductible + $1,900 coinsurance = $2,400
A client is seeking guidance in all areas of financial planning. Which of the following most closely
describes the type of financial planning the client wants? - Answer Comprehensive planning
A planner who addresses only the purchase of a first home for a client is practicing - Answer
targeted financial planning.
Kiara has accumulated $10,000 in a savings account over the last few years and has earmarked
that money as a down payment on a luxury boat. Her central air conditioner breaks and
requires $5,000 in repairs. Kiara is reluctant to spend the money in her savings account to make
the repairs because she wants to use that money for the boat down payment. Instead, she puts
the $5,000 repair charge on her credit card at an annual interest rate of 23%. This is an example
of which of these behaviors? - Answer Mental accounting
Which of the following is a characteristic of properly stated financial goals? - Answer Definite
When helping clients identify goals, financial planners should practice active listening skills by
engaging in all of these except - Answer offering suggestions for goals.
Which of the following financial goals is written correctly? - Answer To accumulate $40,000 in
seven years for a down payment on a house
During which of the following steps in the financial planning process is the current yield from
already-invested assets first identified? - Answer Understanding the client's personal and
financial circumstances
Asset categories that are appropriate for the client are determined during which of the
following steps of the financial planning process? - Answer Developing the financial planning
recommendations
During which of the following steps of the financial planning process is the performance of a
client's investments reviewed periodically? - Answer Monitoring progress and updating
