Questions of the Week

Course: Insurance PlanningLesson 17: Business Uses of Life Insurance STUDENT QUESTION Do buy-sell agreements account for projected growth of the company? Do the life insurance benefits increase over time to account for projected growth, or perhaps can they invest and grow conservatively to keep up with inflation (or COLA on the plan)? INSTRUCTOR RESPONSE A…

Course: Retirement PlanningLesson 1: Using IRAs to Build and Distribute More Retirement Income STUDENT QUESTION Hope all is well! Wanted to clarify contribution limits for qualified plans. My understanding is that it’s the lesser of 1) An annually indexed amount ($72K for 2026) or 2) 100% of an employee’s covered compensation. This example in a…

Student Question Course: Income Tax PlanningLesson 14: Property Transaction STUDENT QUESTION Dear Teacher, in this Example (Jill and Mary), I had some question about the formula of basis increase. I checked with AI and it says: §1015(d)(1) requires using net appreciation ÷ amount of the gift “Amount of the gift” = FMV of the property…

Course: Investment PlanningLesson 13: Asset Allocation editor STUDENT QUESTION I understand that diversification is supposed to reduce risk, and that low correlation between assets is what makes that work. But I’m having trouble seeing WHY low correlation reduces risk rather than just “smoothing out” the returns. If I own two stocks that don’t move together,…

Course: Income Tax PlanningLesson 8: Arriving at Taxable Income Student Question: Hi, In the practice example with Jarrod, his standard deduction was calculated as his $2,000 of earned income plus $450, even though he also had $500 of interest income. Why doesn’t the interest income count toward his standard deduction calculation the way the earned…

Course: Insurance PlanningLesson 9: Disability Income and Long-Term Care Insurance Student Question: Hi, I keep mixing up the elimination period and the maximum benefit period on disability income policies. I understand they’re both periods of time, but on a practice question I picked the wrong one when asked which period affects how soon benefits start.…

Course: Retirement PlanningLesson 1: Using IRAs to Build and Distribute More Retirement Income Student Question: Hi, In the review question with the couple where the husband has $84,000 of taxable compensation and the wife only has $1,000, the answer said the wife could contribute up to $7,500 total between her Traditional and Roth IRAs. I…

Course: Estate PlanningLesson 5: Transfer Taxation II — Lifetime Transfers Student Question: Hi, I understand that a gift of a future interest normally does not qualify for the annual gift tax exclusion, but then the lesson says a Crummey withdrawal power turns it into a present interest gift. I’m confused because the whole point of…

Course: Fundamentals of Financial PlanningLesson 5: Using the Calculator Student Question: Hi, My question relates to being able to clearly distinguish when the CFP Board exam will require an annual, or other period, for the answer. Question 5(b) asks: “What is the annual rate of return on Investment 2, made 3 years ago for $50,000…

Course: Insurance PlanningLesson 10: Social Security Student Question: Hi, On this review page, the correct answer for question 2 (below) indicates that insurance will only cover 97% of replacement cost. However, it says in the chapter that as long as the property is insured for more than 80% of replacement cost, the policy will pay…