FiCEP Final: CUNA Review Exam Questions And
Answers Verified 100% Correct
How do different tax authorities treat items excluded from federal taxable income?
- ANSWER -Exclusions vary from state to state.
What is the first step for effectively managing income taxes? - ANSWER -
Determining your filing status.
What should be the goal of managing a taxpayer's income tax withholding? -
ANSWER -To maintain cash flow while avoiding a tax bill at filing time.
What happens to year-end balances "left over" in Section 125 plans or health
savings accounts (HSAs)? - ANSWER -Section 125 balances are forfeited, while
HSA balances are rolled over
How much can a member in the 25% tax bracket save in federal income taxes by
depositing pre-tax income into tax-deferred retirement accounts, such as traditional
IRAs? - ANSWER -One-fourth of the deposit.
Which statement accurately describes options for reducing income taxes? -
ANSWER -Tax exemptions, deductions, and credits all help reduce income taxes.
Which group of taxpayers usually qualifies for the Earned Income Tax Credit
(EITC)? - ANSWER -Low-income families with earned income qualify for the
credit.
These six expenses are typically accepted by the IRS as itemized deductions: -
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 first step financial counselors can take to determine whether a member
is properly managing their taxes? - ANSWER -Review the member's payroll stub.
What is the meaning of the insurance practice "pooling of risks"? - ANSWER -
Combining risks among insurers as well as groups of individuals.
, What is an insurable interest? - ANSWER -The policyholder's monetary interest
in the insured property.
From the perspective of your financial well-being, what is the best way to decide
whether or not you should insure a particular item? - ANSWER -Consider the risk
to your assets.
Select the correct description for the "elimination period". - ANSWER -How long
a person must be disabled before they are eligible for benefits.
When does Workers' compensation provide benefits to workers? - ANSWER -
When the worker has a work-related illness or injury.
In addition to administrative costs, litigation, and third-party payments, what two
factors have significantly contributed to rising health insurance costs? - ANSWER
-The rising cost of medical technology, as well as the fact that people are living
longer.
How did the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985
impact employee health benefits? - ANSWER -It gave employees the right to
retain health insurance after their job ends by paying the full premium.
If a member decides to purchase long-term care insurance, when is the best time to
obtain a policy? - ANSWER -Sign up while they are still in good health so carriers
will accept you.
What types of insurance policies should be avoided by most members? -
ANSWER -Policies which offer coverage only in very specific conditions, making
it hard to qualify for benefits.
Which group of people is most likely to purchase HO-4, or "contents coverage"? -
ANSWER -Renters
How can a policyholder obtain additional insurance protection for items such as
antiques or guns that might otherwise have only limited insurance reimbursement
for theft or loss due to policy limits? - ANSWER -Purchase a schedule policy
rider, or "schedule" the items.
What is a possible consequence of ignoring exclusions to homeowner's policy? -
ANSWER -The policy may not pay for a claim.
, Under standard property insurance plans, how much of the cost of replacing
property is typically covered? - ANSWER -80%
Who is eligible to participate in the federal government's National Flood Insurance
Program? - ANSWER -Homeowners in participating communities that are
susceptible to floods.
Which statement best defines comprehensive and collision insurance coverage for
vehicles? - ANSWER -Collision is for accidents and comprehensive is for other
forms of damage and theft.
Which factors can impact the cost of vehicle insurance? - ANSWER -The driver's
age and gender, as well as the deductible amount.
How can members reduce auto insurance premiums without violating state laws? -
ANSWER -Comparison shop, increase the deductible, or find discounts.
What type of protection is provided by an umbrella liability policy? - ANSWER -
It protects homeowners and vehicle owners from lawsuits.
What should a member look for when seeking a good insurance agent? -
ANSWER -An agent who is licensed by the state and has completed industry
training.
Which groups have the greatest need for life insurance? - ANSWER -Wage
earners with dependents
Select the correct definition for the "death benefit" of a life insurance policy. -
ANSWER -The amount paid if the insured person dies.
Why is a term life policy often a good choice for members with financial
obligations who are struggling with a tight budget? - ANSWER -It's the most
affordable.
Which statement accurately describes features of term insurance and whole life
insurance? - ANSWER -Whole life policies build cash value and policy settlement
options.
Answers Verified 100% Correct
How do different tax authorities treat items excluded from federal taxable income?
- ANSWER -Exclusions vary from state to state.
What is the first step for effectively managing income taxes? - ANSWER -
Determining your filing status.
What should be the goal of managing a taxpayer's income tax withholding? -
ANSWER -To maintain cash flow while avoiding a tax bill at filing time.
What happens to year-end balances "left over" in Section 125 plans or health
savings accounts (HSAs)? - ANSWER -Section 125 balances are forfeited, while
HSA balances are rolled over
How much can a member in the 25% tax bracket save in federal income taxes by
depositing pre-tax income into tax-deferred retirement accounts, such as traditional
IRAs? - ANSWER -One-fourth of the deposit.
Which statement accurately describes options for reducing income taxes? -
ANSWER -Tax exemptions, deductions, and credits all help reduce income taxes.
Which group of taxpayers usually qualifies for the Earned Income Tax Credit
(EITC)? - ANSWER -Low-income families with earned income qualify for the
credit.
These six expenses are typically accepted by the IRS as itemized deductions: -
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 first step financial counselors can take to determine whether a member
is properly managing their taxes? - ANSWER -Review the member's payroll stub.
What is the meaning of the insurance practice "pooling of risks"? - ANSWER -
Combining risks among insurers as well as groups of individuals.
, What is an insurable interest? - ANSWER -The policyholder's monetary interest
in the insured property.
From the perspective of your financial well-being, what is the best way to decide
whether or not you should insure a particular item? - ANSWER -Consider the risk
to your assets.
Select the correct description for the "elimination period". - ANSWER -How long
a person must be disabled before they are eligible for benefits.
When does Workers' compensation provide benefits to workers? - ANSWER -
When the worker has a work-related illness or injury.
In addition to administrative costs, litigation, and third-party payments, what two
factors have significantly contributed to rising health insurance costs? - ANSWER
-The rising cost of medical technology, as well as the fact that people are living
longer.
How did the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985
impact employee health benefits? - ANSWER -It gave employees the right to
retain health insurance after their job ends by paying the full premium.
If a member decides to purchase long-term care insurance, when is the best time to
obtain a policy? - ANSWER -Sign up while they are still in good health so carriers
will accept you.
What types of insurance policies should be avoided by most members? -
ANSWER -Policies which offer coverage only in very specific conditions, making
it hard to qualify for benefits.
Which group of people is most likely to purchase HO-4, or "contents coverage"? -
ANSWER -Renters
How can a policyholder obtain additional insurance protection for items such as
antiques or guns that might otherwise have only limited insurance reimbursement
for theft or loss due to policy limits? - ANSWER -Purchase a schedule policy
rider, or "schedule" the items.
What is a possible consequence of ignoring exclusions to homeowner's policy? -
ANSWER -The policy may not pay for a claim.
, Under standard property insurance plans, how much of the cost of replacing
property is typically covered? - ANSWER -80%
Who is eligible to participate in the federal government's National Flood Insurance
Program? - ANSWER -Homeowners in participating communities that are
susceptible to floods.
Which statement best defines comprehensive and collision insurance coverage for
vehicles? - ANSWER -Collision is for accidents and comprehensive is for other
forms of damage and theft.
Which factors can impact the cost of vehicle insurance? - ANSWER -The driver's
age and gender, as well as the deductible amount.
How can members reduce auto insurance premiums without violating state laws? -
ANSWER -Comparison shop, increase the deductible, or find discounts.
What type of protection is provided by an umbrella liability policy? - ANSWER -
It protects homeowners and vehicle owners from lawsuits.
What should a member look for when seeking a good insurance agent? -
ANSWER -An agent who is licensed by the state and has completed industry
training.
Which groups have the greatest need for life insurance? - ANSWER -Wage
earners with dependents
Select the correct definition for the "death benefit" of a life insurance policy. -
ANSWER -The amount paid if the insured person dies.
Why is a term life policy often a good choice for members with financial
obligations who are struggling with a tight budget? - ANSWER -It's the most
affordable.
Which statement accurately describes features of term insurance and whole life
insurance? - ANSWER -Whole life policies build cash value and policy settlement
options.
