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Multiple Choice Quiz
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1
The face amount is the amount stated in the policy.
A)True
B)False
2
Term insurance builds up no cash value.
A)True
B)False
3
Twenty-year endowment does not build up any cash value by end of year 5.
A)True
B)False
4
The cash value of a life insurance policy is a cheap source of money.
A)True
B)False
5
The actual amount of insurance carried is called the face value.
A)True
B)False
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
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
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
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
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
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
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
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
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
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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