knowledge topics
Foundations of Life Insurance
KNOWLEDGE EXPECTED OF: Both CFP® Professionals and QAFPTM Professionals
- Explain foundational uses of life insurance, such as:
- Paying final expenses of insured
- Replacing income/asset values
- Funding of goals (upon the death of an individual)
- Retirement of debt
- Education costs for survivors
- Explain approaches to determine a suitable amount of life insurance for an individual, such as:
- Expense coverage
- Cash flow replacement
- Explain characteristics that may be used when comparing term life insurance, whole life, term-to-100 and universal life insurance, such as:
- Premiums over time
- Premium options
- Duration of policies
- Flexibility
- Options for non-payment
- Cash values
- Impact of interest rates
- Involvement in investment decisions
- Impact on overall asset allocation
- Diversification
- Tax impact
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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