Insurance Review

For the past five years, a person has had a $20,000 whole life insurance policy that has a cash value clause. The person decides to surrender the policy. At the time of surrender, the person will receive:

• one-fifth of the $20,000 face value.

• $20,000 less the premiums paid.

• a calculated amount of money which includes the premiums paid as well as the interest on that money.

• a calculated amount of money that must be converted to a term life insurance policy.

Sally took out a $50,000 life insurance policy. The $50,000 amount of coverage is called the:

• Cash value

• Premium value

• Death benefit or face value

• Annuity value

Lucy has no insurance. The situation(s) should she consider insuring against first are:

• Property losses and auto accidents

• Death so her financial obligations are paid

• Losses resulting from an illness, accident, or disability

• Auto collision, and burglary

Richard's auto insurance policy expired on 5/15/2002. Richard was upset with his insurance agent and decided to change insurance companies. At 10:00 a.m. on 5/16/2002, as he drove to a different agent to buy a new policy, he had an accident. Who is liable for damage to his car and his personal injuries?

• The old agent

• Richard

• The new agent

• The old agent is liable for damage to your car and the new agent for personal injuries

John's job provided the main income for his family. He died unexpectedly and had no life insurance. The probable financial consequence for his wife and two children does not include:

• The loss of John's income

• A reduction in the family's standard of living

• Death-related expenses to be paid

• An increase in income and expenses

When a self-employed person decides to purchase disability insurance it is generally to:

• lessen the possibility of becoming injured.

• protect against the financial effects of not being able to work.

• eliminate the chance of going out of business.

• insure that the cost of injury caused to others will be reimbursed.

Why is term life insurance usually the least expensive type of life insurance?

• The policy builds a cash value

• The policy only pays a death benefit

• The policy provides coverage for a lifetime

• The policy is available to all consumers

A person buys a homeowner’s insurance policy with a $250 deductible, which means the person will:

• have to pay a quarterly premium of $250.

• have to pay the first $250 which will be deducted from the claim settlement paid by the insurance company.

• only receive payment from the insurance company of $250 for any single article damaged.

• not be responsible for the first $250 of the claimed damages.

Ben's truck is crushed by a hit-and-run driver. Scott is hit by an uninsured driver. How will they receive payments?

• State motorist coverage

• Insolvent motorist coverage

• Auto liability coverage

• Uninsured or no-fault motorist coverage

When a self-employed person decides to purchase disability insurance it is generally to:

• protect against the financial effects of not being able to work.

• lessen the possibility of becoming injured.

• eliminate the chance of going out of business.

• insure that the cost of injury caused to others will be reimbursed