knowledge topics
Advanced Uses of Life Insurance
KNOWLEDGE EXPECTED OF: Both CFP® Professionals and QAFPTM Professionals
- Explain advanced uses of insurance, such as:
- Funding goals upon death
- Bequests
- Charitable giving
- Preserving capital
- Equalizing estate for survivors
- Funding tax liability upon death
- Funding business continuation or succession upon death of key person
- Providing income stream
- Maximizing defined benefit pension income
- Funding for Retirement Compensation Arrangements (RCA) or Supplemental Executive Retirement Plans (SERP)
- Diversifying assets
- Maintaining privacy of assets
- Guaranteeing future insurability
- Acting as collateral against debt
- Funding goals upon death
- Explain the purpose of an insurance trust.
- Explain for whom an insurance trust may be suitable.
- Identify that it may be possible to sell a life insurance policy to a third party, subject to jurisdictional legislation and regulation.
Glossary of Verbs (mouse over to see definition)
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Define
To state exactly the meaning of
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Identify
To be aware of / to recognize and correctly name / to locate an appropriate resource
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Explain
To make clear the meaning of / to describe something in more detail or reveal relevant facts or ideas related to it
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Compare
To note the similarities and differences between two or more things
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Estimate
To determine an approximate value for
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Calculate
To find the value using mathematics
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Convert
To change from one form or purpose to another
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Evaluate
To reach a conclusion or make a judgement through careful study
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Interpret
To give the meaning of / to construe or understand / to translate orally
Read more about the Taxonomy used in the FP-BoK
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