Question 1

Reduced paid-up insurance means the policy continues for life at a reduced face amount.

Accepted Answer

A) True 
 B)False

Question 2

The property of Vin's Garage is worth $400,000. Vin has a fire insurance policy of $160,000 that contains an 80% coinsurance clause. What will the insurance company pay on a fire that causes $180,000 of damage? If Vin met the coinsurance, how much would the insurance company pay?

Accepted Answer

$400,000 × .8 = $320

Question 3

Calculate cost and refund (use table in text if needed):
 $$\begin{array} { | l | l | l | l | l | } 
\hline \text { Annual Premium } & \text { Canceled After } & \text { Canceled By } & \text { Premium Cost } & \text { Refund } \
\hline \$ 400 & 6 \text { Months } & \text { Insured } & \text { A } & \text { B } \
\hline \$ 800 & 9 \text { Months } & \text { Insurer } & \text { C } & \text { D } \
\hline
\end{array}$$

Accepted Answer

A. $244; B

Question 4

Matt Clark, age 27, decided to take out a limited payment life policy. He chose this because he expects his income to decline in future years. Matt decided to take out a 20-year payment life policy with a coverage amount of $90,000. Calculate his annual premium. If he stops paying premiums after 15 years, what will his cash value be?

Accepted Answer

($90,000 / $1,000)×

Question 5

The short rate cancellation table is used if the insured cancels the policy.

Accepted Answer

A) True 
 B)False

Question 6

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:

Accepted Answer

A) Insured 
B) Insurer 
C) Beneficiary 
D) Both insured and beneficiary 
E) None of these 
A) Insured 
B) Insurer 
C) Beneficiary 
D) Both insured and beneficiary 
E) None of these

Question 7

Match the following terms with their definitions.
-Comprehensive

Accepted Answer

A) Continual premium payments 
B) Used when insured cancels 
C) Blame doesn't matter in payoff 
D) Periodic payment 
E) Not optional
F)Combination of term and whole life
G)Result of a nonforfeiture value
H)Policyholder
I)Amount of insurance stated on the policy
J)Value of policy when terminated
K)Builds no cash value
L)Options when an insurance policy is terminated
M)One to receive face value of life insurance
N)Payment to insured from a loss
O)80%
P)Pay for repairs to one's auto
Q)Amount insured pays
R)The insurance company
S)Fire, theft 
A) Continual premium payments 
B) Used when insured cancels 
C) Blame doesn't matter in payoff 
D) Periodic payment 
E) Not optional
F)Combination of term and whole life
G)Result of a nonforfeiture value
H)Policyholder
I)Amount of insurance stated on the policy
J)Value of policy when terminated
K)Builds no cash value
L)Options when an insurance policy is terminated
M)One to receive face value of life insurance
N)Payment to insured from a loss
O)80%
P)Pay for repairs to one's auto
Q)Amount insured pays
R)The insurance company
S)Fire, theft

Question 8

Match the following terms with their definitions.
-Paid-up insurance

Accepted Answer

A) Continual premium payments 
B) Used when insured cancels 
C) Blame doesn't matter in payoff 
D) Periodic payment 
E) Not optional
F)Combination of term and whole life
G)Result of a nonforfeiture value
H)Policyholder
I)Amount of insurance stated on the policy
J)Value of policy when terminated
K)Builds no cash value
L)Options when an insurance policy is terminated
M)One to receive face value of life insurance
N)Payment to insured from a loss
O)80%
P)Pay for repairs to one's auto
Q)Amount insured pays
R)The insurance company
S)Fire, theft 
A) Continual premium payments 
B) Used when insured cancels 
C) Blame doesn't matter in payoff 
D) Periodic payment 
E) Not optional
F)Combination of term and whole life
G)Result of a nonforfeiture value
H)Policyholder
I)Amount of insurance stated on the policy
J)Value of policy when terminated
K)Builds no cash value
L)Options when an insurance policy is terminated
M)One to receive face value of life insurance
N)Payment to insured from a loss
O)80%
P)Pay for repairs to one's auto
Q)Amount insured pays
R)The insurance company
S)Fire, theft

Question 9

The insurance required to meet coinsurance is:

Accepted Answer

A) 80% × face value 
B) 80% × replacement value 
C) 80% × actual loss 
D) Insurance carried divided by 80% 
E) None of these 
A) 80% × face value 
B) 80% × replacement value 
C) 80% × actual loss 
D) Insurance carried divided by 80% 
E) None of these

Question 10

Match the following terms with their definitions.
-Insurer

Accepted Answer

A) Continual premium payments 
B) Used when insured cancels 
C) Blame doesn't matter in payoff 
D) Periodic payment 
E) Not optional
F)Combination of term and whole life
G)Result of a nonforfeiture value
H)Policyholder
I)Amount of insurance stated on the policy
J)Value of policy when terminated
K)Builds no cash value
L)Options when an insurance policy is terminated
M)One to receive face value of life insurance
N)Payment to insured from a loss
O)80%
P)Pay for repairs to one's auto
Q)Amount insured pays
R)The insurance company
S)Fire, theft 
A) Continual premium payments 
B) Used when insured cancels 
C) Blame doesn't matter in payoff 
D) Periodic payment 
E) Not optional
F)Combination of term and whole life
G)Result of a nonforfeiture value
H)Policyholder
I)Amount of insurance stated on the policy
J)Value of policy when terminated
K)Builds no cash value
L)Options when an insurance policy is terminated
M)One to receive face value of life insurance
N)Payment to insured from a loss
O)80%
P)Pay for repairs to one's auto
Q)Amount insured pays
R)The insurance company
S)Fire, theft

Question 11

Find the following:
 $$\begin{array} { | l | l | l | l | l | } 
\hline \text { Value of Property } & \begin{array} { l } 
\text { Amount of } \
\text { Insurance }
\end{array} & \text { Kind of Policy } & \text { Actual Fire Loss } & \begin{array} { l } 
\text { Amount Insurance } \
\text { Company will Pay }
\end{array} \
\hline \$ 400,000 & \$ 300,000 & 80 \% \text { Coins. } & \$ 120,000 & \text { A } \
\hline
\end{array}$$

Accepted Answer

The answer of Find the following:
 \[\begin{array} { | l...

Question 12

If the insured cancels a fire insurance policy after seven months, the refund will be (use table in handbook):

Accepted Answer

A) 67% 
B) 7/12 of policy 
C) 5/12 of policy 
D) 33% 
E) None of these 
A) 67% 
B) 7/12 of policy 
C) 5/12 of policy 
D) 33% 
E) None of these

Question 13

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 (use the table in the handbook):

Accepted Answer

A) $1,066 
B) $863.46 
C) $1,606 
D) $836.64 
E) None of these 
A) $1,066 
B) $863.46 
C) $1,606 
D) $836.64 
E) None of these

Question 14

Match the following terms with their definitions.
-Beneficiary

Accepted Answer

A) Continual premium payments 
B) Used when insured cancels 
C) Blame doesn't matter in payoff 
D) Periodic payment 
E) Not optional
F)Combination of term and whole life
G)Result of a nonforfeiture value
H)Policyholder
I)Amount of insurance stated on the policy
J)Value of policy when terminated
K)Builds no cash value
L)Options when an insurance policy is terminated
M)One to receive face value of life insurance
N)Payment to insured from a loss
O)80%
P)Pay for repairs to one's auto
Q)Amount insured pays
R)The insurance company
S)Fire, theft 
A) Continual premium payments 
B) Used when insured cancels 
C) Blame doesn't matter in payoff 
D) Periodic payment 
E) Not optional
F)Combination of term and whole life
G)Result of a nonforfeiture value
H)Policyholder
I)Amount of insurance stated on the policy
J)Value of policy when terminated
K)Builds no cash value
L)Options when an insurance policy is terminated
M)One to receive face value of life insurance
N)Payment to insured from a loss
O)80%
P)Pay for repairs to one's auto
Q)Amount insured pays
R)The insurance company
S)Fire, theft

Question 15

Jim Rivera bought a new car and carried only compulsory insurance. On a trip to Washington, he hit a car, injuring the couple inside. Jim's car had damage of $1,800, and the car struck had damage of $1,700. After a lengthy court battle, the couple hit by Jim were awarded personal injury judgments of $16,000 and $8,800, respectively. What did the insurance company pay, and what was Jim's responsibility?

Accepted Answer

The answer of Jim Rivera bought a new car and...

Question 16

Buying flight insurance at an airport is an example of straight-life insurance.

Accepted Answer

A) True 
 B)False

Question 17

John Jay carries a $500 deductible for collision. An accident resulted in $850 worth of damage to his car. What portion will the insurance company pay?

Accepted Answer

The answer of John Jay carries a $500 deductible for...

Question 18

Match the following terms with their definitions.
-Insured

Accepted Answer

A) Continual premium payments 
B) Used when insured cancels 
C) Blame doesn't matter in payoff 
D) Periodic payment 
E) Not optional
F)Combination of term and whole life
G)Result of a nonforfeiture value
H)Policyholder
I)Amount of insurance stated on the policy
J)Value of policy when terminated
K)Builds no cash value
L)Options when an insurance policy is terminated
M)One to receive face value of life insurance
N)Payment to insured from a loss
O)80%
P)Pay for repairs to one's auto
Q)Amount insured pays
R)The insurance company
S)Fire, theft 
A) Continual premium payments 
B) Used when insured cancels 
C) Blame doesn't matter in payoff 
D) Periodic payment 
E) Not optional
F)Combination of term and whole life
G)Result of a nonforfeiture value
H)Policyholder
I)Amount of insurance stated on the policy
J)Value of policy when terminated
K)Builds no cash value
L)Options when an insurance policy is terminated
M)One to receive face value of life insurance
N)Payment to insured from a loss
O)80%
P)Pay for repairs to one's auto
Q)Amount insured pays
R)The insurance company
S)Fire, theft

Question 19

Match the following terms with their definitions.
-Coinsurance

Accepted Answer

A) Continual premium payments 
B) Used when insured cancels 
C) Blame doesn't matter in payoff 
D) Periodic payment 
E) Not optional
F)Combination of term and whole life
G)Result of a nonforfeiture value
H)Policyholder
I)Amount of insurance stated on the policy
J)Value of policy when terminated
K)Builds no cash value
L)Options when an insurance policy is terminated
M)One to receive face value of life insurance
N)Payment to insured from a loss
O)80%
P)Pay for repairs to one's auto
Q)Amount insured pays
R)The insurance company
S)Fire, theft 
A) Continual premium payments 
B) Used when insured cancels 
C) Blame doesn't matter in payoff 
D) Periodic payment 
E) Not optional
F)Combination of term and whole life
G)Result of a nonforfeiture value
H)Policyholder
I)Amount of insurance stated on the policy
J)Value of policy when terminated
K)Builds no cash value
L)Options when an insurance policy is terminated
M)One to receive face value of life insurance
N)Payment to insured from a loss
O)80%
P)Pay for repairs to one's auto
Q)Amount insured pays
R)The insurance company
S)Fire, theft

Question 20

Using the tables in the handbook, calculate Joe Brake's annual auto premium.

Class 17 operator
Compulsory 10/20/5
Symbol 6
Age 3
Optional 50/100 bodily
Collision $300 deductible
Comprehensive $300 deductible
Damage to someone else's property 25M
Towing

Accepted Answer

The answer of Using the tables in the handbook, calculate...

Reduced paid-up insurance means the policy continues for life at a reduced face amount.

The property of Vin's Garage is worth $400,000. Vin has a fire insurance policy of $160,000 that contains an 80% coinsurance clause. What will the insurance company pay on a fire that causes $180,000 of damage? If Vin met the coinsurance, how much would the insurance company pay?

Calculate cost and refund (use table in text if needed): Annual Premium Canceled After Canceled By Premium Cost Refund \ 400 6 Months Insured A B \ 800 9 Months Insurer C D

The short rate cancellation table is used if the insured cancels the policy.

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:

Match the following terms with their definitions. -Comprehensive

Match the following terms with their definitions. -Paid-up insurance

The insurance required to meet coinsurance is:

Match the following terms with their definitions. -Insurer

Find the following: Value of Property Amount of Insurance Kind of Policy Actual Fire Loss Amount Insurance Company will Pay \ 400,000 \ 300,000 80\% Coins. \ 120,000 A

If the insured cancels a fire insurance policy after seven months, the refund will be (use table in handbook):

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 (use the table in the handbook):

Match the following terms with their definitions. -Beneficiary

Buying flight insurance at an airport is an example of straight-life insurance.

John Jay carries a $500 deductible for collision. An accident resulted in $850 worth of damage to his car. What portion will the insurance company pay?

Match the following terms with their definitions. -Insured

Match the following terms with their definitions. -Coinsurance

Using the tables in the handbook, calculate Joe Brake's annual auto premium. Class 17 operator Compulsory 10/20/5 Symbol 6 Age 3 Optional 50/100 bodily Collision $300 deductible Comprehensive $300 deductible Damage to someone else's property 25M Towing

Whole Numbers: How to Dissect and Solve Word Problems

Fractions

Decimals

Banking

Solving for the Unknown: a How-To Approach for Solving Equations

Percents and Their Applications

Discounts: Trade and Cash

Markups and Markdowns: Perishables and Breakeven Analysis

Payroll

Simple Interest

Promissory Notes, Simple Discount Notes, and the Discount Process

Compound Interest and Present Value

Annuities and Sinking Funds

Installment Buying

The Cost of Home Ownership

How to Read, Analyze, and Interpret Financial Reports

Depreciation

Inventory and Overhead

Sales, Excise, and Property Taxes

Stocks, Bonds, and Mutual Funds

Business Statistics

Filters

Exam 20: Life, Fire, and Auto Insurance

Reduced paid-up insurance means the policy continues for life at a reduced face amount.

The property of Vin's Garage is worth $400,000. Vin has a fire insurance policy of $160,000 that contains an 80% coinsurance clause. What will the insurance company pay on a fire that causes $180,000 of damage? If Vin met the coinsurance, how much would the insurance company pay?

Calculate cost and refund (use table in text if needed): Annual Premium Canceled After Canceled By Premium Cost Refund \ 400 6 Months Insured A B \ 800 9 Months Insurer C D

The short rate cancellation table is used if the insured cancels the policy.

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:

Match the following terms with their definitions. -Comprehensive

Match the following terms with their definitions. -Paid-up insurance

The insurance required to meet coinsurance is:

Match the following terms with their definitions. -Insurer

Find the following: Value of Property Amount of Insurance Kind of Policy Actual Fire Loss Amount Insurance Company will Pay \ 400,000 \ 300,000 80\% Coins. \ 120,000 A

If the insured cancels a fire insurance policy after seven months, the refund will be (use table in handbook):

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 (use the table in the handbook):

Match the following terms with their definitions. -Beneficiary

Buying flight insurance at an airport is an example of straight-life insurance.

John Jay carries a $500 deductible for collision. An accident resulted in $850 worth of damage to his car. What portion will the insurance company pay?

Match the following terms with their definitions. -Insured

Match the following terms with their definitions. -Coinsurance

Using the tables in the handbook, calculate Joe Brake's annual auto premium. Class 17 operator Compulsory 10/20/5 Symbol 6 Age 3 Optional 50/100 bodily Collision $300 deductible Comprehensive $300 deductible Damage to someone else's property 25M Towing

Whole Numbers: How to Dissect and Solve Word Problems

Fractions

Decimals

Banking

Solving for the Unknown: a How-To Approach for Solving Equations

Percents and Their Applications

Discounts: Trade and Cash

Markups and Markdowns: Perishables and Breakeven Analysis

Payroll

Simple Interest

Promissory Notes, Simple Discount Notes, and the Discount Process

Compound Interest and Present Value

Annuities and Sinking Funds

Installment Buying

The Cost of Home Ownership

How to Read, Analyze, and Interpret Financial Reports

Depreciation

Inventory and Overhead

Sales, Excise, and Property Taxes

Stocks, Bonds, and Mutual Funds

Business Statistics

Filters