CFP512: Risk Management, Insurance, and Employee Benefits Planning Exam Verified Exam Questions and Answers Latest update 2026/2027

CFP512: Risk Management, Insurance, and Employee Benefits
Planning Exam
Verified Exam Questions and Answers Latest update 2026/2027

Question:
Taxation on life insurance transfer due to divorce -
Answer:
2018 & Before:
premiums deductible to payor, taxable to payee

2019+: premiums NOT deductible to payor or taxable to payee

Question:
Investment in life insurance contract = -
Answer:
premiums - dividends -
loans/withdrawals

Question:
Guaranteed lifetime withdrawal benefit (GLWB) -
Answer:
can withdraw
certain % of contract each year for life regardless of subaccount performance

Question:
Guaranteed minimum withdrawal benefit (GMWB) -
Answer:
can withdraw
certain amount of contract (typically return of premium) during specific period regardless of
subaccount performance

Question:
Guaranteed minimum income benefit (GMIB) -
Answer:
can annuitize to a
certain minimum guaranteed income regardless of subaccount performance

Question:
Guaranteed minimum accumulation benefit (GMAB) -

, Answer:
guarantees
at least return of principal after specific waiting period

Question:
Fixed annuity exclusion ratio = -
Answer:
investment in contract / expected
return

Question:
Variable annuity exclusion ratio = -
Answer:
investment in contract / #
expected annual payments

Question:
Taxable annuity payments -
Answer:
amount in excess of excluded amount

payments beyond projected life expectancy

Question:
Non-natural person as annuity holder -
Answer:
income on contract treated
as ordinary income in that year

loss on contract treated as ordinary loss without limit

Question:
Modified own occupation -
Answer:
Unable to work in occupation
reasonably fitted by education, training, experience, and prior economic status

Question:
Presumptive disability conditions -