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1 | | The face amount is the amount stated in the policy. |
| | A) | True |
| | B) | False |
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2 | | Term insurance builds up no cash value. |
| | A) | True |
| | B) | False |
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3 | | Twenty-year endowment does not build up any cash value by end of year 5. |
| | A) | True |
| | B) | False |
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4 | | The cash value of a life insurance policy is a cheap source of money. |
| | A) | True |
| | B) | False |
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5 | | The actual amount of insurance carried is called the face value. |
| | A) | True |
| | B) | False |
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6 | | 10/20 of bodily injury means that an insurance company will pay up to $20,000 per person, up to a total of 0 people for bodily injury. |
| | A) | True |
| | B) | False |
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7 | | Term insurance: |
| | A) | Is more expensive than straight-life |
| | B) | Builds up cash value |
| | C) | Pays more than face amount |
| | D) | Provides temporary protection |
| | E) | None of the above |
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8 | | Which one of the following builds up no cash value? |
| | A) | Universal life |
| | B) | Straight life |
| | C) | Term |
| | D) | 20-payment life |
| | E) | None of the above |
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9 | | A premium for fire insurance could be lower than someone else's if: |
| | A) | Building is wood |
| | B) | Roof is not fire resistant |
| | C) | Building is close to fire hydrant |
| | D) | Goods within store are flammable |
| | E) | None of the above |
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10 | | An auto insurance premium may be partially based on: |
| | A) | Attitude of a driver |
| | B) | Expected life of car |
| | C) | Make of car |
| | D) | Number of years one expects to drive a car |
| | E) | None of the above |
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11 | | Jane Wish, age 36, has decided to take out a limited payment life policy. She chose this since she expects her income to decline in future years. Jane had decided to take out a twenty-year pay life policy with a coverage amount of $100,000. By using the tables in the handbook, her annual premium would be: |
| | A) | $1,560 |
| | B) | $1,020 |
| | C) | $1,367 |
| | D) | $195 |
| | E) | None of the above |
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12 | | Mum's toy store is worth $500,000 and is insured for $350,000. Assuming an 80 percent coinsurance clause and that a fire caused $170,000 damage, the liability of the insurance company is: |
| | A) | $119,000 |
| | B) | $191,000 |
| | C) | $148,750 |
| | D) | $148,570 |
| | E) | None of the above |
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13 | | Jay Miller insured his pizza shop for $200,000 for fire insurance at an annual rate of $100 of $.49. At the end of 10 months Jay canceled the policy since his pizza shop went out of business. By using the table in the handbook, the refund to Jay is: |
| | A) | $980 |
| | B) | $852.60 |
| | C) | $127.40 |
| | D) | $186.20 |
| | E) | None of the above |
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14 | | Al Short insured his real estate office with a fire insurance policy for $97,000 at a cost of $.64 per $100. Nine months later his insurance company canceled his policy, resulting from failure to correct fire hazard. The cost of the policy to Al was: |
| | A) | $620.80 |
| | B) | $502.85 |
| | C) | $456.06 |
| | D) | $465.60 |
| | E) | None of the above |
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15 | | Al Smith, who lives in Territory 5, carries 10/20/5 compulsory liability insurance along with optional collision that has a $300 deductible. Al who was a fault in an accident caused $4,000 damage to the other auto, as well as $900 damage to his own. Also the courts awarded $15,000 and $7,000 respectively to the two passengers in the other car for personal injuries. Al is responsible to pay a total of: |
| | A) | $5,000 |
| | B) | $5,600 |
| | C) | $600 |
| | D) | $3,000 |
| | E) | None of the above |
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