Question 1

An insurance application is part of the insurance contract.

Accepted Answer

A) True 
 B)False

Question 2

Isabel obtains a fire insurance policy on her home from Justice Insurance Company.The home is lost in a fire,but the parties dispute the amount of Justice's liability under an ambiguous clause in the policy.A court would most likely

Accepted Answer

A) interpret the clause against Isabel. 
B) interpret the clause against Justice. 
C) rewrite the clause and apply it as rewritten. 
D) strike the clause from the policy. 
A) interpret the clause against Isabel. 
B) interpret the clause against Justice. 
C) rewrite the clause and apply it as rewritten. 
D) strike the clause from the policy.

Question 3

Gigi,a twenty-year-old,wants to execute a will before she undertakes a moun-tain-climbing trip on a peak in the Himalaya Mountains.In most states,the legal age for executing a will is

Accepted Answer

A) sixteen years of age. 
B) eighteen years of age. 
C) twenty-one years of age. 
D) twenty-five years of age. 
A) sixteen years of age. 
B) eighteen years of age. 
C) twenty-one years of age. 
D) twenty-five years of age.

Question 4

Dieter's will provides for a distribution of his assets on his death.Who will "distribute" Dieter's property,and what are the steps involved?

Accepted Answer

A will may name an executor to administe

Question 5

Feta is a partner in the game design firm GR8 Games,Inc.,which ob-tains key-person life in-surance on Feta in the amount of $1 million from Halo Insurance Company.Feta quits GR8 Games to join Icy Applications,Inc.Feta dies.Under the principle of insurable interest,Halo must pay the $1 million to

Accepted Answer

A) Feta's spouse Jo. 
B) GR8 Games. 
C) Icy Applications. 
D) no one. 
A) Feta's spouse Jo. 
B) GR8 Games. 
C) Icy Applications. 
D) no one.

Question 6

Myles obtains a property insurance policy from Nova Insurance Company for Myles's restored 1957 Chevy.Nova can cancel the policy

Accepted Answer

A) if Myles increases the risk assumed by the Nova. 
B) if Myles files a claim under the policy. 
C) if Myles appears as a witness in a case brought against Nova. 
D) under no circumstances. 
A) if Myles increases the risk assumed by the Nova. 
B) if Myles files a claim under the policy. 
C) if Myles appears as a witness in a case brought against Nova. 
D) under no circumstances.

Question 7

A nuncupative will is a will that is completely in the handwriting of the testator.

Accepted Answer

A) True 
 B)False

Question 8

Juli types onto a computer what she intends to be "My Will" and prints it out.Juli has capacity."My Will" is

Accepted Answer

A) invalid. 
B) valid if Juli signs it. 
C) valid if Juli signs it and has three witnesses sign it. 
D) valid if Juli signs it,has three witnesses sign it,and files it in a cer-tain state office. 
A) invalid. 
B) valid if Juli signs it. 
C) valid if Juli signs it and has three witnesses sign it. 
D) valid if Juli signs it,has three witnesses sign it,and files it in a cer-tain state office.

Question 9

According to the terms of Diego's will,specific gifts are made,and taxes and other es-tate expenses and debts are paid.The assets of Diego's estate that remain are most likely to be distributed

Accepted Answer

A) by codicil. 
B) holographically. 
C) per capita. 
D) through a residuary clause. 
A) by codicil. 
B) holographically. 
C) per capita. 
D) through a residuary clause.

Question 10

Root & Branch Lumber Company obtains a fire insurance policy from Statistical Insurers,Inc.,on a $400,000 warehouse.The policy includes an 80-percent coinsurance clause.Root & Branch insures the property for $320,000.In a fire,the warehouse suffers $200,000 in damage.Root & Branch can recover

Accepted Answer

A) $400,000. 
B) $320,000. 
C) $200,000. 
D) $80,000. 
A) $400,000. 
B) $320,000. 
C) $200,000. 
D) $80,000.

Question 11

Doctors Medical Associates obtains an insurance policy that protects its members against negligence claims by their pa-tients.This is

Accepted Answer

A) casualty insurance. 
B) fidelity or guaranty insurance. 
C) malpractice insurance. 
D) workers' compensation insurance. 
A) casualty insurance. 
B) fidelity or guaranty insurance. 
C) malpractice insurance. 
D) workers' compensation insurance.

Question 12

Insurance coverage is never effective until a formal written policy is issued.

Accepted Answer

A) True 
 B)False

Question 13

If no heirs are found,the property of a decedent is transferred to a charitable organization.

Accepted Answer

A) True 
 B)False

Question 14

In most states,a person must be sixteen years of age to execute a valid will.

Accepted Answer

A) True 
 B)False

Question 15

Haya obtains an insurance policy from Inviolable Insurance Corporation (IIC).IIC may cancel,or refuse to renew,the policy because of

Accepted Answer

A) Haya's appearance as a witness against IIC. 
B) Haya's gender. 
C) Haya's national origin. 
D) none of the choices. 
A) Haya's appearance as a witness against IIC. 
B) Haya's gender. 
C) Haya's national origin. 
D) none of the choices.

Question 16

Mason creates a trust to prevent his son,Newt,the beneficiary,from assign-ing his rights to future payments of income from the trust.This is

Accepted Answer

A) a charitable trust. 
B) a constructive trust. 
C) a spendthrift trust. 
D) an illegal trust. 
A) a charitable trust. 
B) a constructive trust. 
C) a spendthrift trust. 
D) an illegal trust.

Question 17

Speedy Shipping Corporation applies to TransInsurance Company for a fire insurance pol-icy on Speedy's warehouse.On the application,Speedy misrepresents the age of the property to obtain a lower premium.When a fire soon destroys the ware-house,TransInsurance can

Accepted Answer

A) deny payment,because a fire destroyed Speedy's warehouse. 
B) deny payment,because of Speedy's fraud in the application. 
C) not deny payment,because a fire destroyed Speedy's warehouse. 
D) not deny payment,because the application is not part of the policy. 
A) deny payment,because a fire destroyed Speedy's warehouse. 
B) deny payment,because of Speedy's fraud in the application. 
C) not deny payment,because a fire destroyed Speedy's warehouse. 
D) not deny payment,because the application is not part of the policy.

Question 18

Bret obtains a fire insurance policy on his rental house with Continental Insurance Company.Like all insurance,this policy is an arrangement for

Accepted Answer

A) avoiding the assumption of responsibility. 
B) predicting a potential loss based on unknown factors. 
C) shifting the imposition of liability. 
D) transferring and allocating risk. 
A) avoiding the assumption of responsibility. 
B) predicting a potential loss based on unknown factors. 
C) shifting the imposition of liability. 
D) transferring and allocating risk.

Question 19

An insurer has a duty to avoid the payment of claims.

Accepted Answer

A) True 
 B)False

Question 20

Skyler dies after having made a valid will.Skyler has died

Accepted Answer

A) in escheat. 
B) in probate. 
C) intestate. 
D) testate. 
A) in escheat. 
B) in probate. 
C) intestate. 
D) testate.

Exam 29: Insurance, wills, and Trusts

An insurance application is part of the insurance contract.

Isabel obtains a fire insurance policy on her home from Justice Insurance Company.The home is lost in a fire,but the parties dispute the amount of Justice's liability under an ambiguous clause in the policy.A court would most likely

Gigi,a twenty-year-old,wants to execute a will before she undertakes a moun-tain-climbing trip on a peak in the Himalaya Mountains.In most states,the legal age for executing a will is

Dieter's will provides for a distribution of his assets on his death.Who will "distribute" Dieter's property,and what are the steps involved?

Feta is a partner in the game design firm GR8 Games,Inc.,which ob-tains key-person life in-surance on Feta in the amount of $1 million from Halo Insurance Company.Feta quits GR8 Games to join Icy Applications,Inc.Feta dies.Under the principle of insurable interest,Halo must pay the $1 million to

Myles obtains a property insurance policy from Nova Insurance Company for Myles's restored 1957 Chevy.Nova can cancel the policy

A nuncupative will is a will that is completely in the handwriting of the testator.

Juli types onto a computer what she intends to be "My Will" and prints it out.Juli has capacity."My Will" is

According to the terms of Diego's will,specific gifts are made,and taxes and other es-tate expenses and debts are paid.The assets of Diego's estate that remain are most likely to be distributed

Root & Branch Lumber Company obtains a fire insurance policy from Statistical Insurers,Inc.,on a $400,000 warehouse.The policy includes an 80-percent coinsurance clause.Root & Branch insures the property for $320,000.In a fire,the warehouse suffers $200,000 in damage.Root & Branch can recover

Doctors Medical Associates obtains an insurance policy that protects its members against negligence claims by their pa-tients.This is

Insurance coverage is never effective until a formal written policy is issued.

If no heirs are found,the property of a decedent is transferred to a charitable organization.

In most states,a person must be sixteen years of age to execute a valid will.

Haya obtains an insurance policy from Inviolable Insurance Corporation (IIC).IIC may cancel,or refuse to renew,the policy because of

Mason creates a trust to prevent his son,Newt,the beneficiary,from assign-ing his rights to future payments of income from the trust.This is

Speedy Shipping Corporation applies to TransInsurance Company for a fire insurance pol-icy on Speedy's warehouse.On the application,Speedy misrepresents the age of the property to obtain a lower premium.When a fire soon destroys the ware-house,TransInsurance can

Bret obtains a fire insurance policy on his rental house with Continental Insurance Company.Like all insurance,this policy is an arrangement for

An insurer has a duty to avoid the payment of claims.

Skyler dies after having made a valid will.Skyler has died

The Legal and Constitutional Environment of Business

Courts and Alternative Dispute Resolution

Ethics and Business Decision Making

Tort Law

Intellectual Property

Internet Law,social Media,and Privacy

Criminal Law and Cyber Crime

Nature and Classification

Agreement in Traditional and E-Contracts

Consideration, capacity, and Legality

Defenses to Contract Enforceability

Third Party Rights and Discharge

Breach and Remedies

The Formation of Sales and Lease Contracts

Performance and Breach of Sales and Lease Contracts

Warranties and Product Liability

Negotiability, transferability, and Liability

Checks and Banking in the Digital Age

Secured Transactions

Creditors Rights and Bankruptcy

Agency Relationships

Employment Law

Sole Proprietorships, partnerships, and Limited Liability Companies

Corporate Formation, financing, and Termination

Corporate Directors, officers, and Shareholders

Investor Protection, insider Trading, and Corporate Governance

Personal Property and Bailments

Real Property and Landlord-Tenant Law

Liability of Accountants and Other Professionals

International Law in a Global Economy

Filters