Question 1

The type of life insurance in which the investment portion pays a variable interest rate is:

Accepted Answer

A)  double indemnity 
B)  universal life 
C)  whole life 
D)  variable life 
E)  term life 
A)  double indemnity 
B)  universal life 
C)  whole life 
D)  variable life 
E)  term life

Question 2

The following types of life insurance have a cash surrender value except:

Accepted Answer

A)  term life 
B)  universal life 
C)  whole life 
D)  straight life 
E)  limited-payment life 
A)  term life 
B)  universal life 
C)  whole life 
D)  straight life 
E)  limited-payment life

Question 3

What type of clause in an insurance policy states that the insurer will pay for a covered loss only to the extent that it exceeds a certain stated amount that the insured pays toward that loss?

Accepted Answer

A)  indemnity clause 
B)  coinsurance clause 
C)  endorsement clause 
D)  deductible clause 
E)  subrogation clause 
A)  indemnity clause 
B)  coinsurance clause 
C)  endorsement clause 
D)  deductible clause 
E)  subrogation clause

Question 4

Coinsurance clauses are not common in fire insurance policies.

Accepted Answer

A) True 
 B)False

Question 5

Workers compensation was designed to make payments to those workers who put more time in on the job.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is true about the parties to an insurance policy?

Accepted Answer

A)  The insured and the owner can be the same person. 
B)  The owner and beneficiary can be the same person. 
C)  The insurer and the insured can be the same person. 
D)  The beneficiary cannot be changed during the period that the policy is in effect. 
E)  Both A and B. 
A)  The insured and the owner can be the same person. 
B)  The owner and beneficiary can be the same person. 
C)  The insurer and the insured can be the same person. 
D)  The beneficiary cannot be changed during the period that the policy is in effect. 
E)  Both A and B.

Question 7

A homeowners policy includes coverage for theft of the insured personal property,but not when the insured has the property away from the home.

Accepted Answer

A) True 
 B)False

Question 8

Mary purchases automobile insurance including all types of coverage available.Mary is driving home from work one afternoon when there is a severe thunderstorm threatening the town in which she lives.She hears on the radio that this storm contains large hail.She considers going directly home without making a planned stop at a building supply store so that she can put the car in her garage,but decides to take a chance and stop at the store anyway.While she is in the store,heavy hail falls and breaks out three of the windows in her car.Just as she is leaving,she notices a couple of vandals who break out the remaining windows of her car and flee.Which would be covered under the comprehensive portion of Mary's auto insurance policy?

Accepted Answer

A)  Both the hail damage and the vandalism damage. 
B)  The vandalism damage,but not the hail damage,because she assumed the risk by choosing to leave her car parked outside in the storm. 
C)  Damage from neither source would be covered because her actions choosing to park outside in the storm was the proximate cause of both types of damage. 
D)  The damage from the hail storm,but not the vandalism because it was the willful act of third parties who are responsible for the damage they caused. 
E)  The damage from the hail storm,but the vandalism damage only if the vandals are caught and prosecuted. 
A)  Both the hail damage and the vandalism damage. 
B)  The vandalism damage,but not the hail damage,because she assumed the risk by choosing to leave her car parked outside in the storm. 
C)  Damage from neither source would be covered because her actions choosing to park outside in the storm was the proximate cause of both types of damage. 
D)  The damage from the hail storm,but not the vandalism because it was the willful act of third parties who are responsible for the damage they caused. 
E)  The damage from the hail storm,but the vandalism damage only if the vandals are caught and prosecuted.

Question 9

Which of the following is not one of the parties to a standard life insurance contract?

Accepted Answer

A)  owner 
B)  insurance company 
C)  insurance broker 
D)  insured 
E)  beneficiary 
A)  owner 
B)  insurance company 
C)  insurance broker 
D)  insured 
E)  beneficiary

Question 10

Which of the following is not covered under the typical homeowners insurance policy?

Accepted Answer

A)  Damage to the primary dwelling unit. 
B)  Damage to appurtenant structures such as garages. 
C)  Theft of personal property from the primary dwelling unit. 
D)  Theft of personal property from the insured while the insured is traveling. 
E)  All of these are covered under the typical homeowners insurance policy. 
A)  Damage to the primary dwelling unit. 
B)  Damage to appurtenant structures such as garages. 
C)  Theft of personal property from the primary dwelling unit. 
D)  Theft of personal property from the insured while the insured is traveling. 
E)  All of these are covered under the typical homeowners insurance policy.

Question 11

Insurance companies need only refund policy premiums if an insured commits suicide before the date specified in the suicide clause of the life insurance policy.

Accepted Answer

A) True 
 B)False

Question 12

The insurance industry is regulated:

Accepted Answer

A)  by Congress under the commerce clause 
B)  by the Central Insurance Regulatory Agency 
C)  by state law pursuant to the McCarran-Ferguson Act 
D)  by self-regulation 
E)  by the Sherman Act 
A)  by Congress under the commerce clause 
B)  by the Central Insurance Regulatory Agency 
C)  by state law pursuant to the McCarran-Ferguson Act 
D)  by self-regulation 
E)  by the Sherman Act

Question 13

When major natural disasters strike,there are some insurance companies that are not able to pay their claims because they have not purchased adequate reinsurance.How might this problem be minimized? Would disclosure requirements or reinsurance coverage requirements be better?

Accepted Answer

A difficulty is that large numbers of po

Exam 50: Insurance

The type of life insurance in which the investment portion pays a variable interest rate is:

The following types of life insurance have a cash surrender value except:

What type of clause in an insurance policy states that the insurer will pay for a covered loss only to the extent that it exceeds a certain stated amount that the insured pays toward that loss?

Coinsurance clauses are not common in fire insurance policies.

Workers compensation was designed to make payments to those workers who put more time in on the job.

Which of the following is true about the parties to an insurance policy?

A homeowners policy includes coverage for theft of the insured personal property,but not when the insured has the property away from the home.

Which of the following is not one of the parties to a standard life insurance contract?

Which of the following is not covered under the typical homeowners insurance policy?

Insurance companies need only refund policy premiums if an insured commits suicide before the date specified in the suicide clause of the life insurance policy.

The insurance industry is regulated:

When major natural disasters strike,there are some insurance companies that are not able to pay their claims because they have not purchased adequate reinsurance.How might this problem be minimized? Would disclosure requirements or reinsurance coverage requirements be better?

Legal Heritage and the Information Age

Court Systems and Jurisdiction

Judicial, Alternative, and Online Dispute Resolution

Constitutional Law for Business and E-Commerce

Intentional Torts and Negligence

Strict Liability and Product Liability

Intellectual Property and Cyber Piracy

Criminal Law and Cyber Crimes

Nature of Traditional and E-Contracts

Agreement

Consideration and Promissory Estoppel

Capacity and Legality

Genuineness of Assent and Undue Influence

Statute of Frauds and Equitable Exceptions

Third-Party Rights and Discharge

Remedies for Breach of Traditional and E-Contracts

Internet Law and E-Commerce

Formation of Sales and Lease Contracts

Title to Goods and Risk of Loss

Remedies for Breach of Sales and Lease Contracts

Sales and Lease Warranties

Creation of Negotiable Instruments

Transferability and Holder In Due Course

Liability,Defenses and Discharge

Checks, the Banking System, and E-Money

Creditor's and Debtor's Rights

Secured Transactions and Electronic Filing

Bankruptcy and Reorganization

Agency Formation and Termination

Liability of Principals, Agents, and Independent Contractors

Employment,Worker Protection,and Immigration Laws

Labor Law and Collective Bargaining

Equal Opportunity in Employment

Small Businesses, Entrepreneurs, and General Partnerships

Limited Partnerships and Limited Liability Limited Partnerships

Corporate Formation and Financing

Corporate Governance and the Sarbanes Oxley Act

Corporate Acquisitions and Multinational Corporations

Limited Liability Companies and Limited Liability Partnerships

Franchises and Special Forms of Business

Investor Protection and Online Securities Transactions

Ethics and Social Responsibility of Business

Administrative Law and Regulatory Agencies

Consumer Protection and Product Safety

Environmental Protection and Global Warming

Antitrust Law and Unfair Trade Practices

Personal Property and Bailment

Real Property

Landlord Tenant Law and Land Use Regulation

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