Question 1

Calculate the annual insurance premium for the following:
Rating area: 3; class B; building $95,000; contents for $50,000.

Accepted Answer

$904.50

Question 2

The property of Lance's Garage is worth $90,000. Lance has a fire insurance policy of $40,000 that contains an 80% coinsurance clause. On a fire that causes $60,000 of damage, the insurance company pays:

Accepted Answer

A) $27,777.78 
B) $27,777.87 
C) $33,333.33 
D) $33,330.00 
E) None of these 
A) $27,777.78 
B) $27,777.87 
C) $33,333.33 
D) $33,330.00 
E) None of these C

Question 3

In terms of premium cost, the most expensive type of insurance is:

Accepted Answer

A) Term 
B) Straight life 
C) 20-payment life 
D) 20-year endowment 
E) None of these 
A) Term 
B) Straight life 
C) 20-payment life 
D) 20-year endowment 
E) None of these D

Question 4

Lee's toy store is worth $400,000 and is insured for $300,000. Assuming an 80% coinsurance clause and a fire that caused $190,000 of damage, the liability of the insurance company is:

Accepted Answer

A) $142,500 
B) $124,500 
C) $187,125 
D) $178,125 
E) None of these 
A) $142,500 
B) $124,500 
C) $187,125 
D) $178,125 
E) None of these

Question 5

Find the following:
 $$\begin{array} { | l | l | l | l | l | } 
\hline \text { Annual Premium } & \text { Canceled After } & \text { Canceled By } & \text { Premium Cost } & \text { Refund } \
\hline \$ 600 & 7 \text { months } & \text { Insured } & \text { A } & \text { B } \
\hline
\end{array}$$

Accepted Answer

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

Question 6

Ann Rill insured her dress shop for $75,000 of fire insurance at an annual rate per $100 of $.63. At the end of nine months, Ann canceled the policy since her dress shop went out of business. What was the cost of Ann's premium as well as her refund?

Accepted Answer

The answer of Ann Rill insured her dress shop for...

Question 7

Janet opened a second bridal shop and paid $1,200 for annually fire insurance. As a result of the Great Recession, she was forced to close her shop after four months. What did the insurance cost her?

Accepted Answer

The answer of Janet opened a second bridal shop and...

Question 8

The premium is the payment(s)that is made to pay for the cost of an insurance policy.

Accepted Answer

A) True 
 B)False

Question 9

No-fault insurance does not reduce premiums for collision, property damage, or comprehensive.

Accepted Answer

A) True 
 B)False

Question 10

Reduced paid-up insurance:

Accepted Answer

A) Buys protection with paying new premiums 
B) Continues for 20 years 
C) Results in a face amount less than the original amount 
D) Means original face amount is continued for a certain number of years 
E) None of these 
A) Buys protection with paying new premiums 
B) Continues for 20 years 
C) Results in a face amount less than the original amount 
D) Means original face amount is continued for a certain number of years 
E) None of these

Question 11

Match the following terms with their definitions.
-Collision

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 12

Find the following:
 $$\begin{array} { | l | l | l | l | l | } 
\hline \text { Annual Premium } & \text { Canceled After } & \text { Canceled By } & \text { Premium Cost } & \text { Refund } \
\hline \text { \$300 } & \text { 7 Months } & \text { Insured } & \text { A } & \text { B } \
\hline
\end{array}$$

Accepted Answer

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

Question 13

Collision and comprehensive:

Accepted Answer

A) Only pay the insurer 
B) Only pay the insured 
C) Are compulsory insurance 
D) Have no deductibles 
E) None of these 
A) Only pay the insurer 
B) Only pay the insured 
C) Are compulsory insurance 
D) Have no deductibles 
E) None of these

Question 14

Insurance required to meet coinsurance is the coinsurance rate times the replacement value.

Accepted Answer

A) True 
 B)False

Question 15

Tom Brotherton decided at age 44 to purchase a five-year term policy for $500,000. What is his monthly premium?

Accepted Answer

The answer of Tom Brotherton decided at age 44 to...

Question 16

The actual amount of insurance carried is called the face value.

Accepted Answer

A) True 
 B)False

Question 17

Match the following terms with their definitions.
-Nonforfeiture

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 18

Match the following terms with their definitions.
-Compulsory

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

If Joe Wheel decides to decrease his deductible to $100 for collision, what is the additional cost?

Accepted Answer

The answer of If Joe Wheel decides to decrease his...

Question 20

Term insurance:

Accepted Answer

A) Is more expensive than straight life 
B) Builds up cash value 
C) Pays more than the face amount 
D) Provides temporary protection 
E) None of these 
A) Is more expensive than straight life 
B) Builds up cash value 
C) Pays more than the face amount 
D) Provides temporary protection 
E) None of these

Exam 20: Life, Fire, and Auto Insurance

Calculate the annual insurance premium for the following: Rating area: 3; class B; building $95,000; contents for $50,000.

The property of Lance's Garage is worth $90,000. Lance has a fire insurance policy of $40,000 that contains an 80% coinsurance clause. On a fire that causes $60,000 of damage, the insurance company pays:

In terms of premium cost, the most expensive type of insurance is:

Lee's toy store is worth $400,000 and is insured for $300,000. Assuming an 80% coinsurance clause and a fire that caused $190,000 of damage, the liability of the insurance company is:

Find the following: Annual Premium Canceled After Canceled By Premium Cost Refund \ 600 7 months Insured A B

Ann Rill insured her dress shop for $75,000 of fire insurance at an annual rate per $100 of $.63. At the end of nine months, Ann canceled the policy since her dress shop went out of business. What was the cost of Ann's premium as well as her refund?

Janet opened a second bridal shop and paid $1,200 for annually fire insurance. As a result of the Great Recession, she was forced to close her shop after four months. What did the insurance cost her?

The premium is the payment(s)that is made to pay for the cost of an insurance policy.

No-fault insurance does not reduce premiums for collision, property damage, or comprehensive.

Reduced paid-up insurance:

Match the following terms with their definitions. -Collision

Find the following: Annual Premium Canceled After Canceled By Premium Cost Refund \3 00 7 Months Insured A B

Collision and comprehensive:

Insurance required to meet coinsurance is the coinsurance rate times the replacement value.

Tom Brotherton decided at age 44 to purchase a five-year term policy for $500,000. What is his monthly premium?

The actual amount of insurance carried is called the face value.

Match the following terms with their definitions. -Nonforfeiture

Match the following terms with their definitions. -Compulsory

If Joe Wheel decides to decrease his deductible to $100 for collision, what is the additional cost?

Term insurance:

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