Wealth & Legacy Badge Pre-Assessment – HBCU | The American College of Financial Services

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Name

Which TWO factors dictate the appropriate risk management strategy?

A. Frequency
B. Intensity
C. Severity

A & C

B & C

A & B

Risk transfer through insurance is the appropriate strategy for which combination?

High severity, high frequency

High severity, low frequency

Low severity, low frequency

Low severity, high frequency

None

Whole life insurance has a savings feature and term policy does not.

True

False

None

Although property protection is frequently mandated by law (auto-insurance), personal protection is more consequential to individuals and families financial circumstances (life insurance, health insurance).

True

False

None

The following are important considerations in insurance need:

Health

Life Expectancy

Occupation

Dependents

All of the above

None

Assume you want the premium payments for your car insurance to be as low as possible. What can you do?

Increase the deductible on your car insurance.

Lower the deductible on your car insurance.

Nothing, because your premium payments are dictated by your driving record.

Switch insurance agents and hope for a better price.

None

Assume you want the lowest personal cost in case of an accident with your car insurance. What can you do?

Increase the deductible on your car insurance.

Lower the deductible on your car insurance.

Nothing, because your premium payments are dictated by your driving record.

Switch insurance agents and hope for a better price.

None

Making a plan for your estate is only important if

you are a millionaire.

you have dependents.

you have known health issues or risks.

you want to protect yourself, your wealth, and your health in any situation.

None

Wealth and legacy only refer to money.

True

False

None

10.

Retirement planning is

A series of precise calculations.

All about having enough money to live on.

Is multifaceted and includes considerations and planning in several domains, aside from just finances.

None

11.

When it comes to retirement income streams, which TWO are the most important considerations?

A. Tax treatment
B. Wills
C. Trusts
D. Liquidity

B & C

A & B

A & C

A & D

12.

When determining an appropriate retirement planning timetable, which TWO are most important?

A. Income
B. Family history
C. Occupation
D. Life expectancy

A & C

B & D

B & C

A & D

None

13.

Which of the following is not one of the 5 retirement risks identified in this course?

Sequence risk

Work-life balance risk

Taxation risk

Inflation risk

None

14.

Once you reach the age of ____ you are required to withdraw a minimum amount from your tax-advantaged retirement accounts, such as traditional IRAs and 401(k)s as taxable income.

None

15.

In order for a will to be valid, all of these are true EXCEPT:

It is in writing and dated.

It is publicly announced and made available to family members.

Created and signed by the testor (maker of the will).

Signed by a witness/es.

None

16.

Which one is not one of the three essential estate planning documents?

Tax filing documents

Will

Durable power of attorney

Advanced directive for health care

None

17.

Only high net worth families with considerable wealth need a will.

True

False

None

18.

A basic will contains all of the following EXCEPT:

Directions involving how assets will be distributed.

Detailed stipulations for how assets can be used by heirs.

Instructions for how debt, expenses and taxes will be paid.

A designated executor, named beneficiaries and nominated guardians for minor children.

None

19.

A durable power of attorney for finances is:

A legal document that authorizes a trusted person, or agent, to manage your finances if you become unable to make decisions for yourself

A legal agreement that allows your agent to make decisions over your financial affairs without having to go to court to ask for that authority

A legal document that allows your agent to use your assets to pay for your everyday expenses and to handle transactions with banks and other financial institutions

All of the above

None

20.

Nadine is in her late 30's and her parents are in their early 60's. Finances, retirement, and end-of-life planning are never discussed. Her parents have worked hard and are nearing retirement age, but the true state of their affairs is unclear, and her Father's health has been in decline in recent months. Nadine is one of three children, she lives closest and is planning to be the caregiver for her parents. Although it is not the norm in her family culture, how would you recommend Nadine move forward?

There is no "correct" answer, just different approaches.

Honor her parents desire to not talk about it and plan to deal with whatever their situation is when they need help.

Have a candid conversation about her own retirement planning process and express her interest in their plans and wishes for retirement.

Demand that they share if they have a will or a retirement plan and plans for end-of-life care.

Share her concerns and sense of overwhelm at the thought of having to decide things for her parents without knowing their wishes, and make it a collaboration with step-by-step growth.

None of the above

All of the above

None

1 out of 20

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