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Multiple Choice Quiz 2
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1
The insurer is the company selling the policy.
A)True
B)False
2
Straight life insurance builds up cash value.
A)True
B)False
3
The short-rate table helps to determine how much of a refund you receive from the insurance company canceling your insurance.
A)True
B)False
4
The older you get the more expensive term insurance can become.
A)True
B)False
5
Out of date fire insurance policies can result in large financial losses.
A)True
B)False
6
25/50 of bodily injury means that an insurance company will pay up to $50,000 per person, up to $25,000 total per accident for bodily injury.
A)True
B)False
7
Collision insurance:
A)is not used today
B)is needed for older cars
C)is an option
D)provides protection from falling trees
E)None of the above
8
Which one of the following has no nonforfeiture value?
A)Universal life
B)Straight life
C)Term
D)20-payment life
E)None of the above
9
Universal Life has all but one of the following:
A)Flexible Premium Schedule
B)A Whole Life Plan
C)Inflexible Premium Schedules
D)Flexible Death Benefits
E)None of the above
10
Coinsurance means:
A)You pay all damages
B)Insurance company pays all damages
C)You and the insurance company share the risk
D)No risks are shared
E)None of the above
11
Christine Sanders, age 38, has decided to take out a limited payment life policy. She chose this since she expects her income to decline in future years. Christine has decided to take out a twenty-payment life policy with a coverage amount of $200,000. By using the tables in the handbook, her annual premium will be:
A)$3,408
B)$4,308
C)$2,984
D)$2,948
E)None of the above
12
Lou's toy store is worth $600,000 and is insured for $400,000. Assuming an 80% coinsurance clause and a fire that caused $150,000 damage, the liability of the insurance company is:
A)$25,000.00
B)$150,000.00
C)$125,000.00
D)$2,500.00
E)None of the above
13
Shari Lewis insured her pizza shop for $300,000 for fire insurance at an annual rate per $100 of $.55. At the end of 9 months Shari canceled the policy since her pizza shop went out of business. By using the table in the handbook, the refund to Shari is:
A)$1,650
B)$331.50
C)$313.50
D)$156.00
E)None of the above
14
Jim Jones insured his real estate office with a fire insurance policy for $88,000 at a cost of $.58 per $100. Eight months later his insurance company canceled his policy, resulting from failure to correct a fire hazard. The cost of the policy to Jim was:
A)$413.24
B)$413.42
C)$127.60
D)$340.27
E)None of the above
15
Bill Blum, who lives in Territory 5, carries 10/20/5 compulsory liability insurance along with optional collision that has a $500 deductible. Bill, who was at fault in an accident, caused $5,000 damage to the other auto, as well as $1,200 damage to his own. Also the courts awarded $16,000 and $9,000 respectively to the two passengers in the other car for personal injuries. Bill is responsible to pay a total of:
A)$500
B)$15,500
C)$20,500
D)$6,500
E)None of the above





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