Risk Management and Employee Benefits – Study Guide and Key Concepts Page 1 2026-04-01
Risk Management and
Employee Benefits – Study
Guide and Key Concepts
1 of 129 Guidehttps://www.stuvia.com/dashboard!@_)#*)(@$)($@*($@)($@*_ 1 Risk Management and Employee Benefits – Study Guide and Key Concepts.pdf
,Book 2 -- Risk Management __ Employee Benefits Page 2 2026-04-01
Which of the following statements regarding Section 162 C // The employer receives an income tax deduction when the bonus is paid. The
executive bonus plans is CORRECT? plan can be discriminatory and the employee is the policyowner.
A) Employer does not receive an income tax deduction
when the bonus is paid.
B) The company is the policyowner
C) Employee has taxable income in the year the bonus is
paid, even if the bonus is paid directly to the insurance
company to cover the premium on the cash value life
insurance policy.
D) The plan cannot be discriminatory
2 of 129 2 Book 2 -- Risk Management __ Employee Benefits.pdf
,Book 2 -- Risk Management __ Employee Benefits Page 3 2026-04-01
John, age 29, and Susie, age 28, have recently married C // Along with their mortgage, John and Susie both have a young child from a
and are meeting with their CFP® professional to review prior marriage and a luxury car. At this point in their lives, life insurance,
their risk management plan. Currently, they have a homeowners insurance, and auto insurance should take priority over long-term
mortgage in excess of $200,000 and drive new luxury care insurance. Typically, long-term care insurance is not a necessary part of a
cars. Both John and Susie have one young child from a couple's risk management plan until they are middle aged or above, between 40
prior marriage. Which of the following types of insurance to 50 years old.
should John and Susie consider to be their lowest
priority?
A) Collision and liability insurance for their luxury cars
B) Homeowners insurance
C) Long-term care insurance
D) Life insurance
3 of 129 3 Book 2 -- Risk Management __ Employee Benefits.pdf
, Book 2 -- Risk Management __ Employee Benefits Page 4 2026-04-01
Adam, age 75, has been blind for 2 years. He has trouble A // Neither sight nor cooking is considered an activity of daily living (ADL). The
walking and is unable to cook for himself. His family has Health Insurance Portability and Accountability Act (HIPAA) requires that qualified
told him that he needs to consider entering an assisted long-term care policies define chronically ill as being unable to perform 2 of the 6
living facility. Would Adam be considered chronically ill ADLs. The 6 ADLs are eating, bathing, dressing, transferring from bed to chair,
under a qualified long-term care policy? using the toilet, and maintaining continence.
A) No, neither sight nor cooking is considered an activity
of daily living.
B) Yes, he has been unable to perform 2 activities of daily
living for over 90 days.
C) Yes, as long as he can prove to the insurance company
he is unable to perform these tasks.
D) No, sight is not considered an activity of daily living,
although cooking is.
4 of 129 4 Book 2 -- Risk Management __ Employee Benefits.pdf
Risk Management and
Employee Benefits – Study
Guide and Key Concepts
1 of 129 Guidehttps://www.stuvia.com/dashboard!@_)#*)(@$)($@*($@)($@*_ 1 Risk Management and Employee Benefits – Study Guide and Key Concepts.pdf
,Book 2 -- Risk Management __ Employee Benefits Page 2 2026-04-01
Which of the following statements regarding Section 162 C // The employer receives an income tax deduction when the bonus is paid. The
executive bonus plans is CORRECT? plan can be discriminatory and the employee is the policyowner.
A) Employer does not receive an income tax deduction
when the bonus is paid.
B) The company is the policyowner
C) Employee has taxable income in the year the bonus is
paid, even if the bonus is paid directly to the insurance
company to cover the premium on the cash value life
insurance policy.
D) The plan cannot be discriminatory
2 of 129 2 Book 2 -- Risk Management __ Employee Benefits.pdf
,Book 2 -- Risk Management __ Employee Benefits Page 3 2026-04-01
John, age 29, and Susie, age 28, have recently married C // Along with their mortgage, John and Susie both have a young child from a
and are meeting with their CFP® professional to review prior marriage and a luxury car. At this point in their lives, life insurance,
their risk management plan. Currently, they have a homeowners insurance, and auto insurance should take priority over long-term
mortgage in excess of $200,000 and drive new luxury care insurance. Typically, long-term care insurance is not a necessary part of a
cars. Both John and Susie have one young child from a couple's risk management plan until they are middle aged or above, between 40
prior marriage. Which of the following types of insurance to 50 years old.
should John and Susie consider to be their lowest
priority?
A) Collision and liability insurance for their luxury cars
B) Homeowners insurance
C) Long-term care insurance
D) Life insurance
3 of 129 3 Book 2 -- Risk Management __ Employee Benefits.pdf
, Book 2 -- Risk Management __ Employee Benefits Page 4 2026-04-01
Adam, age 75, has been blind for 2 years. He has trouble A // Neither sight nor cooking is considered an activity of daily living (ADL). The
walking and is unable to cook for himself. His family has Health Insurance Portability and Accountability Act (HIPAA) requires that qualified
told him that he needs to consider entering an assisted long-term care policies define chronically ill as being unable to perform 2 of the 6
living facility. Would Adam be considered chronically ill ADLs. The 6 ADLs are eating, bathing, dressing, transferring from bed to chair,
under a qualified long-term care policy? using the toilet, and maintaining continence.
A) No, neither sight nor cooking is considered an activity
of daily living.
B) Yes, he has been unable to perform 2 activities of daily
living for over 90 days.
C) Yes, as long as he can prove to the insurance company
he is unable to perform these tasks.
D) No, sight is not considered an activity of daily living,
although cooking is.
4 of 129 4 Book 2 -- Risk Management __ Employee Benefits.pdf
