Insurance Review

Gwen receives a bill from her auto insurance company, and she sends a check to the company to make sure her policy is not cancelled. The cost of her policy is called the:

• Co-insurance clause

• Premium

• Deductible

• Exclusion

Mr. Akon's wife died. The money he received as the beneficiary on her life insurance is called the:

• Cash value

• Death benefit or face value

• Separate value

• Premium or annuity value

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

• The new agent

• Richard

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

A person buys a flat screen, plasma, theater-like television. The person has homeowner?s insurance. Why would it be appropriate to add a personal property floater to that insurance?

• To reduce the premium on the homeowner?s insurance.

• To protect the person who owns the television from liability for damages.

• To show the insurance company a good faith investment has been made.

• To cover the cost of replacement should the television get damaged or stolen.

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

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.

The only type of life insurance that does not develop a cash value is:

• Term life insurance

• Whole life insurance

• Universal life insurance

• Variable universal life insurance

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.

A woman has just received a very expensive piece of jewelry. The woman has homeowner's insurance. Which statement would it be most appropriate for her to make to her insurance agent?

• I think I need a personal property floater.

• I think I should get speculative risk insurance.

• I will deduct the cost of the jewelry from my premium.

• I realize that if this jewelry is stolen it will be considered vicarious liability.

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