Complete the Exam Study Guide. I have provided materials to assist in doing so.
Name: _____________________
Exam 2 Review
The exam will be short answer questions. To be adequately prepared for the exam, you should study and prepare short answers to the following questions and topics:
1. Explain the difference between pure risk and speculative risk.
2. Describe how insurance policies work.
3. What is longevity risk?
4. What is income risk?
5. What affects the amount of a person’s Social Security Retirement Benefit? How can that amount be manipulated by the person? What happens to the benefit paid to the surviving spouse after the death of the other spouse?
6. What does an annuity do? What’s its primary benefit, and what are the potential drawbacks of using one?
7. How does a reverse mortgage work? What’s the best way to use a reverse mortgage?
8. What is an equity glidepath, why do we use it, and why does it work so well?
9. How can you tell if a client needs life insurance?
10. What is the difference between term insurance policies and cash value policies? When is
it appropriate for a household to use cash value policies?
11. What are the differences between Whole, Universal, Variable, and Variable Universal life
insurance policies?
12. Describe the bucket withdrawal strategy: how to do it, what its benefits are, and why it
works.
13. Describe the floor and growth withdrawal strategy: how to do it, what its benefits are, and
why it works.
