HS 355: RICP EXAM QUESTIONS WITH
CORRECT ANSWERS
Characteristics of Role Specific moral obligations EXCEPT - ANSWER Generally shared
by all people
Age 50 person takes IRA withdrawals and avoid 10% penalty with substantially equal
periodic payments. Which is true: - ANSWER If they elect amortization, they can make a
one time change.
If a client wants to self fund significant amount of long-term care, but have some
protection. What is the most effective benefit? - ANSWER 90-day service elimination
period
LI inside of a 401k plan. Face value = $100k , CV = $25k, Basis = $5k. What portion of
death benefit payout is taxable? - ANSWER $20k. CV - Basis. Term death benefit is
excluded
Tax situation of hybrid LTC is true EXCEPT - ANSWER Premium paid can be itemize
deducted. Only qualified traditional LTC may be tax deductible
Shifting from lower yield bonds to higher is the least likely to accomplish? - ANSWER
Reducing the volatility of the portfolio.
LTC Premium increased in 2000s because: - ANSWER Unexpectedly high persistency
rates
Exceptions to the 10% early withdrawal penalty are(is)? - ANSWER Death benefit
exception applies to all distributions made to an adult child beneficiary
Partial Annuitization & Portfolio failure rate: - ANSWER Annuity payout is higher than
desired, it clearly increases the sustainability of the portfolio.
Equity goes up after the annuity, sustainability depends on the return assumptions.
Adult Active Communities - ANSWER Don't provide health care options, nor do they
have more than two models (only age 55 (80%) & 62 (100%))
Medicare Part B - ANSWER The part of the Medicare program that pays for preventative
physician services, outpatient hospital services, durable medical equipment, and other
services and supplies. (Not custodial)
Income Maximum for MAGI Part B table - ANSWER $750k for 2021 - highest premium
threshold
Cash Balance Pensions - ANSWER Life annuity election that is actuarially equivalent to
, the lump sum value.
RMD Rules - ANSWER Turning age 72 before the end of the year (marks first distribution
year. for calculation use the balance as of 12/31/prior year & divide by lifetime table)
Continuing care Retirement Community (CCRC)` - ANSWER New residents must be
pre-screened for health. There are 4 types of CCRCs but each facility typically only
offers 1.
Net Unrealized Appreciation (NUA) - ANSWER 10% Early penalty only to amount
recognized as ordinary income. Advantageous for people over 59.5 because of avoiding
the tax. Also, for anyone planning to use the funds soon.
Benefits of qualified state partnership plan: - ANSWER Qualified plans enable more
effective asset spend down for Medicaid eligibility
Older American Act Program - ANSWER Provides respite care for family caregivers
Framwork to integrate insurance and investments for retirement income are true
EXCEPT: - ANSWER Annuity is gateway to actuarial science (FALSE)
Correct answer is PLI is the gateway to actuarial science.
Defined benefit calculation - ANSWER Income * Multiplier * LOS = benefit amt
Medicare enrollment timing - ANSWER 3 months before birthday, month of, and 3
months following (7 months in total)
QDC's from IRA are true EXCEPT - ANSWER Allowed only after age 72 (FALSE)
Allowed after age 70.5
Relocation after retirement is true EXCEPT - ANSWER At no point does moving rate
increase for retirees. (FALSE)
It does increase towards end of life.
Dynamic asset allocation is correct EXCEPT - ANSWER Minimax theory is one of
strategies (FALSE) - its an investment selection philosophy.
Dynamic includes: Adaptive, valuation based & lifecycle
Ethics differ from compliance EXCEPT - ANSWER Ethical obligations express minimal
level of responsible behavior. (False)
True of family lease-back strategy EXCEPT - ANSWER Transaction costs are higher than
reverse mortgages. (FALSE)
Actually, lower in most cases but have other downsides.
HECM Reverse Mortgage - ANSWER Loan doesn't have to be repaid when the eligible
CORRECT ANSWERS
Characteristics of Role Specific moral obligations EXCEPT - ANSWER Generally shared
by all people
Age 50 person takes IRA withdrawals and avoid 10% penalty with substantially equal
periodic payments. Which is true: - ANSWER If they elect amortization, they can make a
one time change.
If a client wants to self fund significant amount of long-term care, but have some
protection. What is the most effective benefit? - ANSWER 90-day service elimination
period
LI inside of a 401k plan. Face value = $100k , CV = $25k, Basis = $5k. What portion of
death benefit payout is taxable? - ANSWER $20k. CV - Basis. Term death benefit is
excluded
Tax situation of hybrid LTC is true EXCEPT - ANSWER Premium paid can be itemize
deducted. Only qualified traditional LTC may be tax deductible
Shifting from lower yield bonds to higher is the least likely to accomplish? - ANSWER
Reducing the volatility of the portfolio.
LTC Premium increased in 2000s because: - ANSWER Unexpectedly high persistency
rates
Exceptions to the 10% early withdrawal penalty are(is)? - ANSWER Death benefit
exception applies to all distributions made to an adult child beneficiary
Partial Annuitization & Portfolio failure rate: - ANSWER Annuity payout is higher than
desired, it clearly increases the sustainability of the portfolio.
Equity goes up after the annuity, sustainability depends on the return assumptions.
Adult Active Communities - ANSWER Don't provide health care options, nor do they
have more than two models (only age 55 (80%) & 62 (100%))
Medicare Part B - ANSWER The part of the Medicare program that pays for preventative
physician services, outpatient hospital services, durable medical equipment, and other
services and supplies. (Not custodial)
Income Maximum for MAGI Part B table - ANSWER $750k for 2021 - highest premium
threshold
Cash Balance Pensions - ANSWER Life annuity election that is actuarially equivalent to
, the lump sum value.
RMD Rules - ANSWER Turning age 72 before the end of the year (marks first distribution
year. for calculation use the balance as of 12/31/prior year & divide by lifetime table)
Continuing care Retirement Community (CCRC)` - ANSWER New residents must be
pre-screened for health. There are 4 types of CCRCs but each facility typically only
offers 1.
Net Unrealized Appreciation (NUA) - ANSWER 10% Early penalty only to amount
recognized as ordinary income. Advantageous for people over 59.5 because of avoiding
the tax. Also, for anyone planning to use the funds soon.
Benefits of qualified state partnership plan: - ANSWER Qualified plans enable more
effective asset spend down for Medicaid eligibility
Older American Act Program - ANSWER Provides respite care for family caregivers
Framwork to integrate insurance and investments for retirement income are true
EXCEPT: - ANSWER Annuity is gateway to actuarial science (FALSE)
Correct answer is PLI is the gateway to actuarial science.
Defined benefit calculation - ANSWER Income * Multiplier * LOS = benefit amt
Medicare enrollment timing - ANSWER 3 months before birthday, month of, and 3
months following (7 months in total)
QDC's from IRA are true EXCEPT - ANSWER Allowed only after age 72 (FALSE)
Allowed after age 70.5
Relocation after retirement is true EXCEPT - ANSWER At no point does moving rate
increase for retirees. (FALSE)
It does increase towards end of life.
Dynamic asset allocation is correct EXCEPT - ANSWER Minimax theory is one of
strategies (FALSE) - its an investment selection philosophy.
Dynamic includes: Adaptive, valuation based & lifecycle
Ethics differ from compliance EXCEPT - ANSWER Ethical obligations express minimal
level of responsible behavior. (False)
True of family lease-back strategy EXCEPT - ANSWER Transaction costs are higher than
reverse mortgages. (FALSE)
Actually, lower in most cases but have other downsides.
HECM Reverse Mortgage - ANSWER Loan doesn't have to be repaid when the eligible
