RFC Insurance, Risk Management & Taxation

Question 1

What is the primary purpose of life insurance in financial planning?

Accepted Answer

To protect loved ones financially

Answer

To invest in stocks

Answer

To avoid taxes

Answer

To increase credit scores

Question 2

What does risk management involve in financial planning?

Accepted Answer

Protecting assets from loss

Answer

Maximizing tax deductions

Answer

Increasing return volatility

Answer

Minimizing insurance premiums

Question 3

Which type of insurance typically covers liability for accidents in the home?

Accepted Answer

Homeowners insurance

Answer

Auto insurance

Answer

Disability insurance

Answer

Life insurance

Question 4

Which of the following is considered a tax-deferred investment account?

Accepted Answer

Traditional IRA

Answer

Checking account

Answer

Roth IRA

Answer

Savings bond

Question 5

What is the purpose of an umbrella liability insurance policy?

Accepted Answer

Adds protection above basic policy limits

Answer

Covers routine healthcare expenses

Answer

Pays regular income during disability

Answer

Insures property depreciation

Question 6

Which of the following is a progressive tax in the U.S.?

Accepted Answer

Federal income tax

Answer

Sales tax

Answer

Property tax

Answer

Flat state income tax