CFP Module 3 study plan

Define the six risk-handling techniques (avoidance, retention, transfer, sharing, loss reduction, loss prevention) and classify ten real-life scenarios into the correct technique.

Distinguish pure from speculative risk and personal from property/casualty risk, and explain insurable-risk characteristics (fortuitous loss, calculable probability, large number of homogeneous exposure units, definite loss, no catastrophic concentration).

Map the life insurance contract provisions (incontestability, grace period, reinstatement, suicide clause, misstatement of age/sex, entire contract, free-look) to the risk-management problem each provision solves.

Compare term, whole life, universal life, variable life, and indexed universal life on premium flexibility, cash value guarantees, and who bears investment risk.

Build a one-page comparison table of the five policy types plus a glossary of 20 domain-1/2 terms written in your own words.

Explain the tax treatment of life insurance: death benefit exclusions, cash value deferral, policy loans, modified endowment contract (MEC) rules, and the transfer-for-value rule.

Calculate a simple needs analysis using both the human life value approach and the capital retention (needs) approach, and reconcile the two results for one hypothetical family.

Identify the parties and rights in life policies: owner vs. insured vs. beneficiary, irrevocable vs. revocable designations, per stirpes vs. per capita, and common disaster clauses.

Describe settlement options (lump sum, life income, fixed period, fixed amount, interest only) and compute the effect of each on total dollars paid.

Explain riders and supplementary benefits: waiver of premium, accidental death, guaranteed insurability, child term, long-term care and chronic illness riders, and accelerated death benefits.

Differentiate indemnity plans, HMOs, PPOs, POS plans, and HDHPs on network rules, cost sharing, referrals, and out-of-network exposure.

Define and compute deductibles, coinsurance, copayments, out-of-pocket maximums, and coordination-of-benefits outcomes for two overlapping plans.

Explain COBRA qualifying events, election windows, duration (18/29/36 months), and who pays the premium.

Summarize HIPAA portability and privacy basics, ACA marketplaces, essential health benefits, guaranteed issue, and the preventive-services requirement.

Outline Medicare Parts A, B, C, and D plus Medigap: eligibility, enrollment periods, late-enrollment penalties, and what each part does and does not cover.

Describe Social Security retirement, survivor, and disability benefits at a high level, including how the primary insurance amount and early/delayed claiming adjustments work.

Compare long-term care settings (home care, adult day care, assisted living, skilled nursing, memory care) and match each to the level of care a policy will pay for.

Explain LTC policy triggers (activities of daily living, cognitive impairment), benefit periods, elimination periods, inflation protection, and shared-care and partnership programs.

Distinguish own-occupation, any-occupation, and split-definition disability income policies and explain why the definition drives claim outcomes.

Compute disability income benefits including benefit percentage of income, elimination period effects, residual/partial disability formulas, and offsets from Social Security or group coverage.

Identify the tax treatment of disability income and LTC benefits (premium deductibility, benefit taxation under employer-paid vs. employee-paid arrangements).

Explain the homeowners policy structure (Sections I and II, Coverage A through F) and compute a dwelling-loss settlement under replacement cost vs. actual cash value.

Apply coinsurance, deductible, and special-limit rules to a homeowners claim, including the 80% replacement-cost requirement where applicable.

Distinguish the personal auto policy parts (liability, medical payments, uninsured/underinsured motorist, collision, other-than-collision) and identify common exclusions.

Explain negligence elements (duty, breach, causation, damages), comparative vs. contributory negligence, and vicarious liability.

Compare personal umbrella and commercial umbrella/excess liability: drop-down coverage, self-insured retention, required underlying limits, and gaps to watch.

Describe business risk-management tools: commercial general liability, business owners policy, workers compensation, key person insurance, buy-sell funding, and business income coverage.

Explain group life and group health underwriting mechanics: eligibility, actively-at-work rules, evidence of insurability, and experience rating vs. community rating.

Distinguish contributory from noncontributory plans and describe the tax consequences of employer-paid vs. employee-paid premiums for group life, health, and disability.

Describe Section 125 cafeteria plans, flexible spending accounts, health savings accounts, and health reimbursement arrangements, including eligibility and contribution rules.

Outline retirement plan basics: defined benefit vs. defined contribution, 401(k) deferrals and catch-up, employer match, vesting schedules, and ERISA fiduciary duties.

Explain the difference between qualified and nonqualified deferred compensation and how each is taxed.

Integrate domains 1, 8, and 10 by building an enterprise risk register for a small business covering property, liability, key person, business income, and employee benefits exposures.

Quantify retention vs. transfer decisions using expected loss, premium, and risk tolerance for at least three exposures.

Revisit earlier weak spots: re-answer every question you missed in weeks 1 through 6 and write a one-sentence correction for each.

Practice exam-style case vignettes that combine insurance selection with tax and benefit consequences, timing yourself at 1.5 minutes per question.

Take two full-length timed practice exams under exam conditions and record scores by domain.

Rank your domains by accuracy and spend the first half of the week re-drilling only the two lowest-scoring domains.

Recite from memory the key numbers: elimination periods, coinsurance clauses, Medicare enrollment windows, COBRA durations, group life tax thresholds, and umbrella underlying limits.

Write a one-page exam-day strategy covering time allocation, flag-and-return tactics, and how to eliminate answers on calculation questions.