Question 1

A person who would suffer a direct pecuniary loss if a particular piece of property were destroyed has a(n):

Accepted Answer

A)  contractual risk. 
B)  hazard. 
C)  underwriting. 
D)  insurable interest. 
A)  contractual risk. 
B)  hazard. 
C)  underwriting. 
D)  insurable interest.

Question 2

If an insurer denies liability for a loss,the insured or the beneficiary of the policy has the burden of proving that there was a loss that came within the coverage of the policy.

Accepted Answer

A) True 
 B)False

Question 3

The fact that a partnership is terminated after a life insurance policy is obtained by one partner on another invalidates the policy.

Accepted Answer

A) True 
 B)False

Question 4

A homeowner's policy commonly provides protection from losses caused by theft.

Accepted Answer

A) True 
 B)False

Question 5

An insurer may cancel any contract of insurance by the insurer's unilateral act as long as the insurer gives advance written notice.

Accepted Answer

A) True 
 B)False

Question 6

Winona was a person of average intelligence,education,and experience in business.She negotiated for the purchase of insurance and paid the premium.The policy was mailed to her,but before it arrived a loss was suffered.When the policy was read,Winona could not determine whether the loss was covered because the policy was too difficult to understand.The loss is:

Accepted Answer

A)  not covered unless expressly stated to be covered. 
B)  covered because the insurer had an obligation to word the policy in an understandable way. 
C)  not covered unless stated to be so in a rider. 
D)  covered if included in an express exception to the policy. 
A)  not covered unless expressly stated to be covered. 
B)  covered because the insurer had an obligation to word the policy in an understandable way. 
C)  not covered unless stated to be so in a rider. 
D)  covered if included in an express exception to the policy.

Question 7

After the expiration of the incontestability period of a life insurance policy,the insurer must pay the face amount of the policy when the insured dies and cannot claim that in obtaining the policy,the insured had been guilty of misrepresentation,fraud,or any other conduct that would entitle it to avoid the contract of insurance.

Accepted Answer

A) True 
 B)False

Question 8

What type of insurance is written for a specified number of years and terminates at the end of that period?

Accepted Answer

A)  term insurance 
B)  whole life insurance 
C)  endowment insurance 
D)  universal insurance 
A)  term insurance 
B)  whole life insurance 
C)  endowment insurance 
D)  universal insurance

Question 9

For property insurance,an insurable interest must exist:

Accepted Answer

A)  at the time the policy is purchased. 
B)  at the time of the loss. 
C)  both at the time the policy is purchased and at the time the loss is sustained. 
D)  for at least thirty (30)days before the loss is sustained. 
A)  at the time the policy is purchased. 
B)  at the time of the loss. 
C)  both at the time the policy is purchased and at the time the loss is sustained. 
D)  for at least thirty (30)days before the loss is sustained.

Question 10

Sylvia Jurgen operates a florist shop.During a particularly busy day,she allowed one of her employees,Terry Lioni,to use her (Jurgen's)personal car to assist with deliveries.Lioni had just obtained his driver's license.Lioni was involved in an accident that was his fault.Would Jurgen's liability insurance pay in this situation?

Accepted Answer

Yes.Liability policies ordinarily protec

Question 11

A contract of insurance ordinarily is stated in a writing called a policy.

Accepted Answer

A) True 
 B)False

Question 12

A person who obtains life insurance generally can only name a beneficiary that has an insurable interest in the life of the insured.

Accepted Answer

A) True 
 B)False

Question 13

An incontestability clause ordinarily bars contest of the validity of a life insurance policy by the insurer after the lapse of:

Accepted Answer

A)  sixty (60)days. 
B)  one (1)year. 
C)  two (2)years. 
D)  ninety (90)days. 
A)  sixty (60)days. 
B)  one (1)year. 
C)  two (2)years. 
D)  ninety (90)days.

Question 14

Exceptions to coverage are generally strictly interpreted against the insurer.

Accepted Answer

A) True 
 B)False

Question 15

Insurance is a contract by which one party for a stipulated consideration promises to pay another party a sum of money on the destruction of,loss of,or injury to something in which the other party has an interest,or to indemnify that party for any loss or liability to which that party is subjected.

Accepted Answer

A) True 
 B)False

Question 16

The effectiveness of an exception to coverage is limited by:

Accepted Answer

A)  strictly interpreting the exception to coverage against the insurer. 
B)  placing on the insurer the burden of proving that the exception applies. 
C)  both a.and b. 
D)  neither a.nor b. ,since exceptions to coverage are not generally permissible. 
A)  strictly interpreting the exception to coverage against the insurer. 
B)  placing on the insurer the burden of proving that the exception applies. 
C)  both a.and b. 
D)  neither a.nor b. ,since exceptions to coverage are not generally permissible.

Question 17

To collect on property insurance,an insurable interest in the property must exist at the time that the loss is suffered.

Accepted Answer

A) True 
 B)False

Question 18

An application for insurance:

Accepted Answer

A)  may be oral. 
B)  generally is attached to the policy and becomes a part of the insurance contract. 
C)  must be prepared by an attorney. 
D)  has no binding effect on the applicant. 
A)  may be oral. 
B)  generally is attached to the policy and becomes a part of the insurance contract. 
C)  must be prepared by an attorney. 
D)  has no binding effect on the applicant.

Question 19

Any false statement in an application binds the insured.

Accepted Answer

A) True 
 B)False

Question 20

If a man names his wife as beneficiary of his life insurance and the two are thereafter divorced,the insurance policy:

Accepted Answer

A)  is canceled automatically. 
B)  is not affected. 
C)  is divided into two policies on the life of each for one-half the amount of the original policy. 
D)  becomes the property of the former wife. 
A)  is canceled automatically. 
B)  is not affected. 
C)  is divided into two policies on the life of each for one-half the amount of the original policy. 
D)  becomes the property of the former wife.

Exam 36: Insurance

A person who would suffer a direct pecuniary loss if a particular piece of property were destroyed has a(n):

If an insurer denies liability for a loss,the insured or the beneficiary of the policy has the burden of proving that there was a loss that came within the coverage of the policy.

The fact that a partnership is terminated after a life insurance policy is obtained by one partner on another invalidates the policy.

A homeowner's policy commonly provides protection from losses caused by theft.

An insurer may cancel any contract of insurance by the insurer's unilateral act as long as the insurer gives advance written notice.

What type of insurance is written for a specified number of years and terminates at the end of that period?

For property insurance,an insurable interest must exist:

A contract of insurance ordinarily is stated in a writing called a policy.

A person who obtains life insurance generally can only name a beneficiary that has an insurable interest in the life of the insured.

An incontestability clause ordinarily bars contest of the validity of a life insurance policy by the insurer after the lapse of:

Exceptions to coverage are generally strictly interpreted against the insurer.

Insurance is a contract by which one party for a stipulated consideration promises to pay another party a sum of money on the destruction of,loss of,or injury to something in which the other party has an interest,or to indemnify that party for any loss or liability to which that party is subjected.

The effectiveness of an exception to coverage is limited by:

To collect on property insurance,an insurable interest in the property must exist at the time that the loss is suffered.

An application for insurance:

Any false statement in an application binds the insured.

If a man names his wife as beneficiary of his life insurance and the two are thereafter divorced,the insurance policy:

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