Question 1

Premiums for whole-life insurance are generally smaller than those for term-life insurance.

Accepted Answer

A) True 
 B)False  False

Question 2

Which of the following types of insurance protects the producer or manufacturer of a good from loss incurred by people who are injured using the good?

Accepted Answer

A)  Contractors' liability 
B)  Strict liability 
C)  Product liability 
D)  Business operations 
E)  Consumer protection 
A)  Contractors' liability 
B)  Strict liability 
C)  Product liability 
D)  Business operations 
E)  Consumer protection C

Question 3

Which of the following is false regarding Internet liability protection policies?

Accepted Answer

A)  They typically cover claims involving copyright and trade infringement. 
B)  They typically cover claims involving alleged plagiarism committed via the Internet. 
C)  They typically cover claims involving failure to protect confidential information gathered online. 
D)  They typically cover claims involving failure to stop a computer virus. 
E)  They typically cover claims involving related to patents or trade secrets. 
A)  They typically cover claims involving copyright and trade infringement. 
B)  They typically cover claims involving alleged plagiarism committed via the Internet. 
C)  They typically cover claims involving failure to protect confidential information gathered online. 
D)  They typically cover claims involving failure to stop a computer virus. 
E)  They typically cover claims involving related to patents or trade secrets. E

Question 4

Which of the following is a term used to define the payment made by an insured party in exchange for a later payment by an insurer in the event of damage or injury to insured property or person?

Accepted Answer

A)  Tag 
B)  Bill 
C)  Premium 
D)  Assessment 
E)  Requirement 
A)  Tag 
B)  Bill 
C)  Premium 
D)  Assessment 
E)  Requirement

Question 5

Which of the following types of life insurance provides coverage for a specified term?

Accepted Answer

A)  Whole-life 
B)  Term-life 
C)  Surrender-life 
D)  Useful-life 
E)  Entire-life 
A)  Whole-life 
B)  Term-life 
C)  Surrender-life 
D)  Useful-life 
E)  Entire-life

Question 6

"Prudence's Imprudence." Unfortunately, Prudence failed to act prudently. She had a bad day after failing a business law test and breaking up with her boyfriend. While drinking a mocha and talking on the cell phone with her best friend, she slammed into the back of George's car. Shortly thereafter she received notice of a lawsuit setting forth George's claims for personal injury and property damage. Prudence was very busy studying for her next business law test and hanging out with her boyfriend with whom she had reconciled. Also, she just did not feel like dealing with a pesky lawsuit. Several months later, Alice, a new agent with the insurer called Prudence and told Prudence that she had just heard something about a lawsuit from the plaintiff's lawyer. Alice told Prudence that although investigation would be difficult after so many months, she would like to talk with Prudence because the trial was scheduled for the next week. Prudence told Alice that she had no time to meet at the moment and that just before court, she would meet with the lawyer the company appointed to represent her. Alice told Prudence that the insurance company was going to deny coverage. Alice also told Prudence that vehicle insurance did not typically provide for legal representation and that, in any event, no lawyer would be provided. Finally, Alice told Prudence that her insurance was cancelled immediately because she was a real jerk and failed to help, that insurance would not pay for accidents that were the fault of Prudence anyway, and that the insurer wanted nothing more to do with her.
-Which of the following is true regarding Alice's complaint that Prudence failed to help?

Accepted Answer

A)  Prudence had a duty to cooperate with the insurer. 
B)  Prudence's only duty was to show up for court; otherwise she had no duty to assist the insurer. 
C)  Prudence's only duty was to show up for a court and for any depositions for which she received a subpoena; otherwise, she had no duty to cooperate with the insurer. 
D)  Prudence had a duty to assist the insurer and to provide a share of funds to help the insurer in defending her claim. 
E)  Prudence had a duty to cooperate with the insurer only because it appears that the accident was her fault. 
A)  Prudence had a duty to cooperate with the insurer. 
B)  Prudence's only duty was to show up for court; otherwise she had no duty to assist the insurer. 
C)  Prudence's only duty was to show up for a court and for any depositions for which she received a subpoena; otherwise, she had no duty to cooperate with the insurer. 
D)  Prudence had a duty to assist the insurer and to provide a share of funds to help the insurer in defending her claim. 
E)  Prudence had a duty to cooperate with the insurer only because it appears that the accident was her fault.

Question 7

A commercial general liability policy provides protection against intentional wrongful acts committed by an insured.

Accepted Answer

A) True 
 B)False

Question 8

Property of Mary is damaged in a fire. She claims the property damage amounted to $10,000, and the insurer claims it only amounted to $5,000. Which of the following is true in this situation?

Accepted Answer

A)  Mary should demand an appraisal under her policy's appraisal clause. 
B)  Mary has no alternative because she must accept the insurer's valuation. 
C)  The insurer is required to accept the insured's valuation unless the insurer can establish that the insured failed to act in good faith. 
D)  Mary should call the state inspector who investigates and makes rulings in such cases. 
E)  Mary should file for a field evaluation. 
A)  Mary should demand an appraisal under her policy's appraisal clause. 
B)  Mary has no alternative because she must accept the insurer's valuation. 
C)  The insurer is required to accept the insured's valuation unless the insurer can establish that the insured failed to act in good faith. 
D)  Mary should call the state inspector who investigates and makes rulings in such cases. 
E)  Mary should file for a field evaluation.

Question 9

"Prudence's Imprudence." Unfortunately, Prudence failed to act prudently. She had a bad day after failing a business law test and breaking up with her boyfriend. While drinking a mocha and talking on the cell phone with her best friend, she slammed into the back of George's car. Shortly thereafter she received notice of a lawsuit setting forth George's claims for personal injury and property damage. Prudence was very busy studying for her next business law test and hanging out with her boyfriend with whom she had reconciled. Also, she just did not feel like dealing with a pesky lawsuit. Several months later, Alice, a new agent with the insurer called Prudence and told Prudence that she had just heard something about a lawsuit from the plaintiff's lawyer. Alice told Prudence that although investigation would be difficult after so many months, she would like to talk with Prudence because the trial was scheduled for the next week. Prudence told Alice that she had no time to meet at the moment and that just before court, she would meet with the lawyer the company appointed to represent her. Alice told Prudence that the insurance company was going to deny coverage. Alice also told Prudence that vehicle insurance did not typically provide for legal representation and that, in any event, no lawyer would be provided. Finally, Alice told Prudence that her insurance was cancelled immediately because she was a real jerk and failed to help, that insurance would not pay for accidents that were the fault of Prudence anyway, and that the insurer wanted nothing more to do with her.
-On which of the following legal theories would the insurer likely attempt to deny coverage?

Accepted Answer

A)  Negligence 
B)  Recklessness 
C)  Breach of contract 
D)  Misrepresentation 
E)  Illegality 
A)  Negligence 
B)  Recklessness 
C)  Breach of contract 
D)  Misrepresentation 
E)  Illegality

Question 10

Which of the following is false in regard to an insurer's right to cancel a policy of insurance?

Accepted Answer

A)  An insurer who rightfully cancels a policy is not required to a refund of premium payments covering future time periods. 
B)  Typically a grace period is required before a policy may be cancelled. 
C)  State statutes usually govern the circumstances under which an insurer may cancel a policy. 
D)  If an insured fails to pay premiums after a certain period, the insurance company may cancel. 
E)  Car insurance may be canceled if the insured loses her license because of a driving violation. 
A)  An insurer who rightfully cancels a policy is not required to a refund of premium payments covering future time periods. 
B)  Typically a grace period is required before a policy may be cancelled. 
C)  State statutes usually govern the circumstances under which an insurer may cancel a policy. 
D)  If an insured fails to pay premiums after a certain period, the insurance company may cancel. 
E)  Car insurance may be canceled if the insured loses her license because of a driving violation.

Question 11

Federal law is the primary law addressing when an insurance company can cancel a policy of insurance.

Accepted Answer

A) True 
 B)False

Question 12

Penny, a bit of a hypochondriac, decides that she should have MRIs covering her whole body and insists that her doctor order them. Penny tells her doctor that she is not concerned about cost because she has great insurance. Which of the following is the appropriate and recognized term for the problem associated with her behavior as far as an insurer is concerned?

Accepted Answer

A)  Hypochondria neurosis 
B)  Hypochondria psychosis 
C)  Moral hazard 
D)  Medical excessiveness 
E)  Unfair persuasiveness 
A)  Hypochondria neurosis 
B)  Hypochondria psychosis 
C)  Moral hazard 
D)  Medical excessiveness 
E)  Unfair persuasiveness

Question 13

Life insurance protects a person who is unable to work due to disability.

Accepted Answer

A) True 
 B)False

Question 14

If a policy of insurance protects a person or property from accidental injury, the insurance is referred to as ______ insurance.

Accepted Answer

A)  Casualty 
B)  Loss 
C)  Economic 
D)  Accidental 
E)  Injury 
A)  Casualty 
B)  Loss 
C)  Economic 
D)  Accidental 
E)  Injury

Question 15

As a matter of federal law, arbitration clauses are illegal in policies of insurance.

Accepted Answer

A) True 
 B)False

Question 16

"Prudence's Imprudence." Unfortunately, Prudence failed to act prudently. She had a bad day after failing a business law test and breaking up with her boyfriend. While drinking a mocha and talking on the cell phone with her best friend, she slammed into the back of George's car. Shortly thereafter she received notice of a lawsuit setting forth George's claims for personal injury and property damage. Prudence was very busy studying for her next business law test and hanging out with her boyfriend with whom she had reconciled. Also, she just did not feel like dealing with a pesky lawsuit. Several months later, Alice, a new agent with the insurer called Prudence and told Prudence that she had just heard something about a lawsuit from the plaintiff's lawyer. Alice told Prudence that although investigation would be difficult after so many months, she would like to talk with Prudence because the trial was scheduled for the next week. Prudence told Alice that she had no time to meet at the moment and that just before court, she would meet with the lawyer the company appointed to represent her. Alice told Prudence that the insurance company was going to deny coverage. Alice also told Prudence that vehicle insurance did not typically provide for legal representation and that, in any event, no lawyer would be provided. Finally, Alice told Prudence that her insurance was cancelled immediately because she was a real jerk and failed to help, that insurance would not pay for accidents that were the fault of Prudence anyway, and that the insurer wanted nothing more to do with her.
-Which of the following is true regarding the assertion of Alice that vehicle insurance policies do not generally provide coverage for legal representation?

Accepted Answer

A)  She is incorrect. 
B)  She is correct only in situations in which a student with a student policy is involved in an accident. 
C)  She is correct only in situations in which an insured has had at least two previous accidents. 
D)  She is correct only in situations in which a student is carried on a parent's insurance policy. 
E)  She is correct because insureds are expected to shoulder some of the burden of accidents. 
A)  She is incorrect. 
B)  She is correct only in situations in which a student with a student policy is involved in an accident. 
C)  She is correct only in situations in which an insured has had at least two previous accidents. 
D)  She is correct only in situations in which a student is carried on a parent's insurance policy. 
E)  She is correct because insureds are expected to shoulder some of the burden of accidents.

Question 17

A[n] ______ is a term identifying the person who receives insurance proceeds in the event of injury or damage.

Accepted Answer

A)  Receiver 
B)  Obtainer 
C)  Insured 
D)  Beneficiary 
E)  Identified 
A)  Receiver 
B)  Obtainer 
C)  Insured 
D)  Beneficiary 
E)  Identified

Question 18

If an insurance policy covers an individual's life or health, the insurance is ______ insurance.

Accepted Answer

A)  Personal 
B)  Unitary 
C)  Individual 
D)  Family 
E)  Protection 
A)  Personal 
B)  Unitary 
C)  Individual 
D)  Family 
E)  Protection

Question 19

The insured party in insurance law is the party who makes a payment to an insurance company, called a premium, in return for insurance coverage.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following types of insurance protects members of specific professions from liability associated with their professional acts?

Accepted Answer

A)  Business liability 
B)  Licensed 
C)  Trained liability 
D)  Professional liability 
E)  Consumer 
A)  Business liability 
B)  Licensed 
C)  Trained liability 
D)  Professional liability 
E)  Consumer

Exam 51: Insurance Law

Premiums for whole-life insurance are generally smaller than those for term-life insurance.

Which of the following types of insurance protects the producer or manufacturer of a good from loss incurred by people who are injured using the good?

Which of the following is false regarding Internet liability protection policies?

Which of the following is a term used to define the payment made by an insured party in exchange for a later payment by an insurer in the event of damage or injury to insured property or person?

Which of the following types of life insurance provides coverage for a specified term?

A commercial general liability policy provides protection against intentional wrongful acts committed by an insured.

Property of Mary is damaged in a fire. She claims the property damage amounted to $10,000, and the insurer claims it only amounted to $5,000. Which of the following is true in this situation?

Which of the following is false in regard to an insurer's right to cancel a policy of insurance?

Federal law is the primary law addressing when an insurance company can cancel a policy of insurance.

Life insurance protects a person who is unable to work due to disability.

If a policy of insurance protects a person or property from accidental injury, the insurance is referred to as ______ insurance.

As a matter of federal law, arbitration clauses are illegal in policies of insurance.

A[n] ______ is a term identifying the person who receives insurance proceeds in the event of injury or damage.

If an insurance policy covers an individual's life or health, the insurance is ______ insurance.

The insured party in insurance law is the party who makes a payment to an insurance company, called a premium, in return for insurance coverage.

Which of the following types of insurance protects members of specific professions from liability associated with their professional acts?

An Introduction to Dynamic Business Law

Business Ethics

The US Legal System

Alternative Dispute Resolution

Constitutional Principles

International and Comparative Law

Crime and the Business Community

Tort Law

Negligence and Strict Liability

Product Liability

Liability of Accountants and Other Professionals

Intellectual Property

Introduction to Contracts

Agreement

Consideration

Capacity and Legality

Legal Assent

Contracts in Writing

Third-Party Rights to Contracts

Discharge and Remedies

Introduction to Sales and Lease Contracts

Title, Risk of Loss, and Insurable Interest

Performance and Obligations Under Sales and Leases

Remedies for Breach of Sales and Lease Contracts

Warranties

Negotiable Instruments: Negotiability and Transferability

Negotiation, Holder in Due Course, and Defenses

Liability, Defenses, and Discharge

Checks and Electronic Fund Transfers

Secured Transactions

Other Creditors Remedies and Suretyship

Bankruptcy and Reorganization

Agency Formation and Duties

Liability to Third Parties and Termination

Forms of Business Organization

Partnerships: Nature, Formation, and Operation

Partnerships: Termination and Limited Partnerships

Corporations: Formation and Financing

Corporations: Directors, Officers, and Shareholders

Corporations: Mergers, Consolidations, Terminations

Corporations: Securities and Investor Protection

Employment and Labor Law

Employment Discrimination

Administrative Law

Consumer Law

Environmental Law

Antitrust Law

The Nature of Property, Personal Property, and Bailments

Real Property

Landlord-Tenant Law

Wills and Trusts

Filters