Exam 9: Risk Management

Calculate Joe Brake's auto premium.

Calculate the cost of the premium:

Premiums for straight-life insurance are higher than premiums for term insurance.

The one named in the policy to receive the insurance proceeds in case of the death of the one taking out the policy is the:

As a result of coinsurance, the insurance company might pay more than face value.

What is the cash value of the policy at the end of 20 years?

Stephanie received a $100,000 term life insurance policy as part of her employment compensation. What did her company pay for the five-year term policy if Stephanie was 44 at the time of employment?

Calculate the amount the insurance company will pay: A. ______________ B. ______________

If the insured cancels a fire insurance policy after seven months, the refund will be:

Joan Raft had taken out an $80,000 fire insurance policy for her new shop at a rate of $.81 per $100. Seven months later, Joan canceled the policy and decided to move the shop to a new location. What refund did she receive?

Lowering deductibles for collision will result in increased premiums.

Jim Smith, age 25, buys a straight-life policy for $105,000. What is his annual premium? If after 15 years he no longer wants to pay the premium, what nonforfeiture values are available to him?

Howard Hane had taken out a $130,000 fire insurance policy for his new restaurant at a rate of $.82 per $100. Nine months later, Howard canceled the policy and decided to move his store to a new location. The cost of the premium to Howard is:

The premium for fire insurance is found by the insured value divided by 100 times the table rate.