Question 1

The cash value of a life insurance policy is a cheap source of money.

Accepted Answer

A) True 
 B)False

Question 2

Term insurance builds up no cash value.

Accepted Answer

A) True 
 B)False

Question 3

Match the following terms with their definitions.
-Short rate table

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 4

Nonforfeiture values could result in the insured being paid the cash value of the policy and the policy being terminated.

Accepted Answer

A) True 
 B)False

Question 5

Ben's office building with $200,000 value has a rating area of 1 with a building class of B. The contents are valued at $90,000. Using the table lookup, what is the total annual premium for both?

Accepted Answer

A) $108.00 
B) $486.00 
C) $820.00 
D) $1,306.00 
E) None of these 
A) $108.00 
B) $486.00 
C) $820.00 
D) $1,306.00 
E) None of these

Question 6

Matt Miller, age 28, takes out $50,000 of straight-life insurance. His annual premium is $418.20. At the end of 20 years, the cash value of his policy is (use the tables in the handbook):

Accepted Answer

A) $13,250 
B) $26,000 
C) $26,500 
D) $30,000 
E) None of these 
A) $13,250 
B) $26,000 
C) $26,500 
D) $30,000 
E) None of these

Question 7

Alice Stone is thinking about taking out $90,000 of five-year term insurance. Alice is 35 years old. What will her annual premium be?

Accepted Answer

The answer of Alice Stone is thinking about taking out...

Question 8

Twenty-payment life requires premiums for 20 years although the insured is protected till death.

Accepted Answer

A) True 
 B)False

Question 9

Jenny Siebert purchased a new Ford Explorer and insured it for compulsory 10/20/5. She lives in Territory 5. She is classified as 10. Her car is age 3 and symbol 4. Calculate Jenny's compulsory insurance.

Accepted Answer

The answer of Jenny Siebert purchased a new Ford Explorer...

Question 10

10/20 of bodily injury means that an insurance company will pay up to $20,000 per person up to a total of 10 people for bodily injury.

Accepted Answer

A) True 
 B)False

Question 11

Jim opened a new pizza shop. He insures his store for $90,000 for fire. What is his premium if the rate per $100 is $0.83?

Accepted Answer

A) $74.70 
B) $74,700 
C) $700 
D) $747.00 
E) None of these 
A) $74.70 
B) $74,700 
C) $700 
D) $747.00 
E) None of these

Question 12

A falling object that dents a car would be covered under comprehensive insurance.

Accepted Answer

A) True 
 B)False

Question 13

All states have the same compulsory insurance.

Accepted Answer

A) True 
 B)False

Question 14

Find the following:
 $$\begin{array} { | l | l | l | l | } 
\hline \text { Face Value } & \text { Age and Sex of Insured } & \text { Type of Insurance } & \text { Annual Premium } \
\hline \$ 60,000 & 38 \mathrm {~F} & \text { Straight Life } & \text { A } \
\hline
\end{array}$$

Accepted Answer

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

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

Complete the cost of the premium for fire insurance:
 $$\begin{array} { | l | l | l | l | } 
\hline \text { Rate of Area } & \text { Class } & \text { Building } & \text { Contents } \
\hline 2 & \text { B } & \$ 80,000 & \$ 35,000 \
\hline
\end{array}$$

Accepted Answer

The answer of Complete the cost of the premium for...

Question 17

Permanent protection is provided by term insurance.

Accepted Answer

A) True 
 B)False

Question 18

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?

Accepted Answer

The answer of Stephanie received a $100,000 term life insurance...

Question 19

Round all answers to nearest cent (as appropriate).
LIFE INSURANCE
Use tables in handbook (for females subtract three years)Calculate annual premium:
 $\begin{array}{|l|l|l|l|}
\hline\text { Face Value } & \text { Age \& Sex of Insured } & \text { Type of Insurance } & \text { Annual Premium } \
\hline \$ 108,000 & 21 \mathrm{M} & 5 \text {-Year Term } & \mathbf{A} \
\hline \$ 40,000 & 42 \mathrm{~F} & \text { Straight Life } & \mathrm{B} \
\hline 90,000 & 22 \mathrm{M} & \text { - } 0 \text {-Pay Life } & \mathrm{C} \
\hline \$ 120,000 & 32 \mathrm{~F} & \text { Straight Life } & \mathrm{D} \
\hline
\end{array}$
$\text { E. What is the cash value of policy in } D \text { at the end of } 10 \text { years? }$

Accepted Answer

A. $199.80; B. $552.

Question 20

Calculate the annual premium for life insurance by using the table lookup for: $$\begin{array} { l l } 
\text { Face Value: } & \$ 60,000 \
\text { Gender: } & \text { Female } \
\text { Type: } & \text { Straight-Life Policy } \
\text { Age } & 38
\end{array}$$

Accepted Answer

A) $7,920 
B) $787.20 
C) $675.60 
D) $600.00 
E) None of these 
A) $7,920 
B) $787.20 
C) $675.60 
D) $600.00 
E) None of these

Exam 20: Life, Fire, and Auto Insurance

The cash value of a life insurance policy is a cheap source of money.

Term insurance builds up no cash value.

Match the following terms with their definitions. -Short rate table

Nonforfeiture values could result in the insured being paid the cash value of the policy and the policy being terminated.

Ben's office building with $200,000 value has a rating area of 1 with a building class of B. The contents are valued at $90,000. Using the table lookup, what is the total annual premium for both?

Matt Miller, age 28, takes out $50,000 of straight-life insurance. His annual premium is $418.20. At the end of 20 years, the cash value of his policy is (use the tables in the handbook):

Alice Stone is thinking about taking out $90,000 of five-year term insurance. Alice is 35 years old. What will her annual premium be?

Twenty-payment life requires premiums for 20 years although the insured is protected till death.

Jenny Siebert purchased a new Ford Explorer and insured it for compulsory 10/20/5. She lives in Territory 5. She is classified as 10. Her car is age 3 and symbol 4. Calculate Jenny's compulsory insurance.

10/20 of bodily injury means that an insurance company will pay up to $20,000 per person up to a total of 10 people for bodily injury.

Jim opened a new pizza shop. He insures his store for $90,000 for fire. What is his premium if the rate per $100 is $0.83?

A falling object that dents a car would be covered under comprehensive insurance.

All states have the same compulsory insurance.

Find the following: Face Value Age and Sex of Insured Type of Insurance Annual Premium \ 60,000 38 Straight Life A

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

Complete the cost of the premium for fire insurance: Rate of Area Class Building Contents 2 B \ 80,000 \ 35,000

Permanent protection is provided by term insurance.

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 annual premium for life insurance by using the table lookup for: Face Value: \ 60,000 Gender: Female Type: Straight-Life Policy Age 38

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