FiCEP Final : CUNA Review Exam Questions With Revised Answers
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Course
Ficep
Institution
Ficep
FiCEP Final : CUNA Review Exam
Questions With Revised Answers
Select the statement that correctly describes a progressive tax. - answerA progressive tax
requires people to pay more as they earn more.
Pick the statement that best describes a regressive tax. - answerA regressive tax charges the
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FiCEP Final : CUNA Review Exam
Questions With Revised Answers
Select the statement that correctly describes a progressive tax. - answer✔✔A progressive tax
requires people to pay more as they earn more.
Pick the statement that best describes a regressive tax. - answer✔✔A regressive tax charges the
same tax rate regardless of the taxpayer's income.
Why are government fees and surcharges sometimes described as a form of tax? -
answer✔✔Because they generate income for the government.
Which taxing authorities are worthy of the member's attention? - answer✔✔The member must
attend to all tax authorities at all levels of government to maintain their financial well-being.
How do taxes impact your personal spending? - answer✔✔Taxes can make personal spending go
up or down.
Which is larger: the penalty for failing to pay federal income taxes on time, or the penalty for
failing to file a tax return when taxes are owed? - answer✔✔The penalty for failing to file a tax
return is significantly higher.
What is the right attitude to take toward taxes to protect your financial well-being? -
answer✔✔Taxes are an essential financial responsibility.
When is the IRS most likely to impose the maximum penalty on taxpayers? - answer✔✔When
they are forced to track down the taxpayer.
What is a good rule to follow when dealing with a tax auditor or another issue involving the IRS?
- answer✔✔Never assume the IRS is always correct.
What is the financial counselor's role in aiding members with complex tax issues? -
answer✔✔The counselor provides basic information and refers members to tax programs or tax
experts.
What rule of thumb should be used when defining taxable income? - answer✔✔If you benefit
financially, you are likely to be taxed for it.
Which type of qualified IRA withdrawal is exempt from income tax? - answer✔✔Roth IRA
withdrawals are exempt.
How do different tax authorities treat items excluded from federal taxable income? -
answer✔✔Exclusions vary from state to state.
What is the first step for effectively managing income taxes? - answer✔✔Determining your
filing status.
What should be the goal of managing a taxpayer's income tax withholding? - answer✔✔To
maintain cash flow while avoiding a tax bill at filing time.
What happens to year-end balances "left over" in Section 125 plans or health savings accounts
(HSAs)? - answer✔✔Section 125 balances are forfeited, while HSA balances are rolled over
How much can a member in the 25% tax bracket save in federal income taxes by depositing pre-
tax income into tax-deferred retirement accounts, such as traditional IRAs? - answer✔✔One-
fourth of the deposit.
What is the meaning of the insurance practice "pooling of risks"? - answer✔✔Combining risks
among insurers as well as groups of individuals.
What is an insurable interest? - answer✔✔The policyholder's monetary interest in the insured
property.
From the perspective of your financial well-being, what is the best way to decide whether or not
you should insure a particular item? - answer✔✔Consider the risk to your assets.
Select the correct description for the "elimination period". - answer✔✔How long a person must
be disabled before they are eligible for benefits.
When does Workers' compensation provide benefits to workers? - answer✔✔When the worker
has a work-related illness or injury.
In addition to administrative costs, litigation, and third-party payments, what two factors have
significantly contributed to rising health insurance costs? - answer✔✔The rising cost of medical
technology, as well as the fact that people are living longer.
How did the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 impact
employee health benefits? - answer✔✔It gave employees the right to retain health insurance
after their job ends by paying the full premium.
If a member decides to purchase long-term care insurance, when is the best time to obtain a
policy? - answer✔✔Sign up while they are still in good health so carriers will accept you.
What types of insurance policies should be avoided by most members? - answer✔✔Policies
which offer coverage only in very specific conditions, making it hard to qualify for benefits.
Which group of people is most likely to purchase HO-4, or "contents coverage"? -
answer✔✔Renters
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