Free CFP® exam MCQs – Risk Management and Insurance Planning
Clearing the CERTIFIED FINANCIAL PLANNER™ exam can be a challenging endeavor, and many aspirants find themselves unable to pass despite numerous attempts. This can be attributed to various factors, such as the complexity of the exam, the vast amount of information to grasp, and the need for practical application. However, one crucial aspect that is often overlooked is the lack of adequate practice. Mock tests and CFP® exam practice questions are invaluable tools that enable candidates to familiarize themselves with the exam format, identify areas of improvement, and refine their test-taking strategies.
In this blog, we share 10 practice MCQs from the “risk management and insurance planning” subject that you can find on CFP® Exam Prep App by Achieve. Working on these questions daily will improve your efficiency in assessing a wide range of MCQs within a relatively short amount of time.
Q 1. Tom is a psychiatrist with two children and a wife. He isn’t particularly good at saving money, so he wants to get a life insurance policy that would cover him for the rest of his life and push him to save money. Which of the following is Tom’s best choice?
A. 15-year term life insurance
B. Whole life insurance
C. Variable universal life insurance
D. Irrevocable life insurance
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Q 2. Lucy just started working in a manufacturing facility. She wants to protect herself against total disability and also wants to protect herself against reduced wages if she has a partial disability. Which of the following should Lucy make sure to include in her disability policy?
A. Residual disability benefits
B. Cost-of-living adjustment
C. Waiver of premium
D. Change-of-occupation provision
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Q 3. Ricky is a factory worker who is 56 years old. He decides to get an individual disability coverage to protect his income in the event that he is injured at work. Which of the following is true regarding Ricky’s premiums for this policy?
A. The premiums are unaffordable
B. The premiums are non-deductible
C. The premiums are non-taxable
D. The premiums are refundable
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Q 4. Shawn has a life insurance policy with a fixed premium schedule that will not vary unless he adds more coverage in the future. What kind of insurance coverage does Shawn have?
A. Conditionally renewable
B. Guaranteed renewable
C. Non-cancelable
D. Effective
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Q 5. Which of the following is expected of the insured after a loss caused by a car accident? (1). Permit the insurer to gather medical reports and other relevant records. (2). Send the insurer notices and legal documents related to the claim. (3). Submit proof of loss when required by the insurer. (4). Submit to a physical exam at the insurer’s request if it is relevant to the claim.
A. (l) and (3) only
B. (l), (2), and (3) only
C. (2), (3), and (4) only
D. All of the above
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Q 6. Carlos is married and has a 10-year-old daughter. He earns an annual salary of $95,000, and if he dies his wife will receive $14,000 per year from social security. If the fund can produce a 6.5 percent return, how much life insurance does John need to provide an equivalent income without compromising his principal?
A. $1,203,265
B. $1,279,372
C. $1,327,154
D. $1,385,391
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Q 7. If Christo’s employment was terminated 7 days ago, then he has________ remaining to convert his group term life insurance policy to an individual life insurance policy.
A. 24 days
B. 31 days
C. 60 days
D. 83 days
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Q 8. Isabel is the beneficiary of her brother’s $350,000 life insurance policy, and she is 60 years old. Isabel is a single woman who pays 20% federal taxes and 10% state taxes. How much tax would Isabel owe if her brother died?
A. $0
B. $35,000
C. $70,000
D. $105,000
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Q 9. Debra is an employee of Rex Corporation. As an employee, Debra does not have to report any income with respect to the First_________ of life insurance coverage provided by Rex Corporation through a group plan.
A. $25,000
B. $50,000
C. $75,000
D. $100,000
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Q 10. Matthew slips and falls from his garage roof while he works on it, landing next to the car on the driveway. In the fall, Matthew shattered his arm. Which of his insurance policies should he try to collect on and will he be successful in doing so?
A. Coverage F, medical payment insurance on his homeowners
B. Medical pay on his auto insurance
C. His personal health insurance policy
D. His extended coverage on his life insurance policy
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To push your limits, make it a point to tackle CFP® exam questions that span across easy, intermediate, and advanced difficulty levels. It may feel intimidating at first as you may struggle to solve the problems. But keep going and practice more questions as it will refine your level of understanding and over time you will take less time to solve more questions accurately on the CFP® Exam Prep by Achieve App.