Ch. 20 Quiz

Instructions
Ch.20 Quiz

This assessment is worth 100 points.

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

      
      

  2. Premiums for straight-life are higher than for term insurance.
       (3 points)

      
      

  3. Twenty-payment life requires premiums for 20 years although the insured is protected till death.
       (3 points)

      
      

  4. Extended term insurance means the policy continues but at a face amount that is less than the original policy.
       (3 points)

      
      

  5. The cash value of a life insurance policy is a cheap source of money.
       (3 points)

      
      

  6. The premium for fire insurance is found by the insured value divided by 100 times the table rate.
       (3 points)

      
      

  7. The actual amount of insurance carried is called the face value.
       (3 points)

      
      

  8. Due to coinsurance the insurance company might pay more than face value.
       (3 points)

      
      

  9. Lowering deductibles for collision will result in increased premiums.
       (3 points)

      
      

  10. Due to few suits as well as high operating costs no fault has reduced some premium costs.
       (3 points)

      
      

  11. The one named in the policy to receive the insurance proceeds in case of the death of one taking out the policy is the:
       (3 points)

    a.  
    b.  
    c.  
    d.  
    e.  

  12. In terms of premium cost the most expensive type of insurance is:
       (3 points)

    a.  
    b.  
    c.  
    d.  
    e.  

  13. Reduced paid-up insurance:
       (3 points)

    a.  
    b.  
    c.  
    d.  
    e.  

  14. If insured cancels a fire insurance policy after 7 months the refund will be: (Use table in handbook)
       (3 points)

    a.  
    b.  
    c.  
    d.  
    e.  

  15. Collision and comprehensive:
       (3 points)

    a.  
    b.  
    c.  
    d.  
    e.  

  16. Joe's office building with a $250,000 value has a rating of 2 with a building classification of A. The contents in the building are valued at $90,000. By using the tables in the handbook the total annual premium is:
       (3 points)

    a.  
    b.  
    c.  
    d.  
    e.  

  17. The property of Jim's Garage is worth $80,000. Jim has a fire insurance policy of $30,000 that contains an 80 percent coinsurance clause. The insurance company pays on a fire that causes $50,000 damage:
       (3 points)

    a.  
    b.  
    c.  
    d.  
    e.  

  18. Ron Howard had taken out a $125,000 fire insurance policy for his new restaurant at a rate of $.66 per $100. Eight months later, Ron canceled the policy and decided to move his store to a new location. The cost of premium to Ron is: (Use the table in the handbook)
       (3 points)

    a.  
    b.  
    c.  
    d.  
    e.  

  19. Jay Miller insured his pizza shop for $200,000 for fire insurance at an annual rate per $100 of $.49. At the end of 10 moths Jay canceled the policy since his pizza shop went out of business. By using the table in the handbook, the refund to Jay is:
       (3 points)

    a.  
    b.  
    c.  
    d.  
    e.  

  20. Given the following information, as well as using the tables in the handbook, the total annual premium is:
    Bill Jay - Territory 5
    Classified Driver 18
    Car age 5 Symbol 6
    State has compulsory insurance and the following options:

    Bodily injury

    100/300

    Damage to someone else's property

    10M

    Comprehensive

    $200 deductible

    Collision

    $300 deductible


       (3 points)

    a.  
    b.  
    c.  
    d.  
    e.  

  21. Note: Round all answers to nearest cent (as appropriate).
    LIFE INSURANCE
    Use tables in handbook (for females subtract 3 years)

    Calculate Annual Premium


    Age & Sex

    Face Value

    of Insured

    Type of Insurance

    Annual Premium

    A) $108,000

    21M

    5-Year Term

    A


    B) $40,000

    42F

    Straight Life

    B


    C) $90,000

    22M

    20-Pay Life

    C


    D) $120,000

    32F

    Straight Life

    D


    E) What is cash value of policy in (D) at end of 10 years?
    A. ______________
    B. ______________
    C. ______________
    D. ______________


       (2 points)

    (* 4000 character limit)

  22. Calculate the amount the Insurance Company will pay

    Value of

    Amount of

    Kind of

    Actual Fire

    Amount Insurance

    Property

    Insurance

    Policy

    Loss

    Company will pay

    $70,000

    $40,000

    80% Co-Ins

    $11,200

    A

    $90,000

    $50,000

    80% Co-Ins

    $36,000

    B

    A. ______________

    B. ______________


       (2 points)

    (* 4000 character limit)

  23. Calculate Cost and Refund (Use table in text if needed)

    Annual

    Premium

    Canceled After

    Canceled By

    Premium Cost

    Refund

    $400

    6 Months

    Insured

    A

    B

    $800

    9 Months

    Insurer

    C

    D

    A. ______________

    B. ______________

    C. ______________

    D. ______________


       (2 points)

    (* 4000 character limit)

  24. Melissa Sorez, age 42, takes out as $300,000 five-year term insurance policy. What is her annual premium? at the end of 3 years, what is her amount of cash value that is built up?
       (2 points)

    (* 4000 character limit)

  25. Joan's Hardware Shop is worth $40,000 and is insured for $30,000. Assuming an 80% coinsurance clause what would the insurance company pay if a fire caused $20,000 damage to the shop?
       (2 points)

    (* 4000 character limit)

  26. Jim Leary insured his bookstore with a fire insurance policy of $90,000 at a cost of $.58 per $100. Eight months later his insurance company canceled his policy because of a failure to correct a fire hazard. What did Jim have to pay for the eight months of coverage?
       (2 points)

    (* 4000 character limit)

  27. Find the annual premium.


    Age and Sex


    Annual

    Face Value

    of Insured

    Type of Insurance

    Premium

    A. $120,000

    20M

    5-Year Term

    A


       (2 points)

    (* 4000 character limit)

  28. Find the annual premium.


    Age and Sex

    Annual

    Face Value

    of Insured

    Type of Insurance

    Premium

    B. $60,000

    38F

    Straight Life

    B


       (2 points)

    (* 4000 character limit)


  29. Age and Sex


    Annual

    Face Value

    of Insured

    Type of Insurance

    Premium

    D. $50,000

    28M

    Straight Life

    D


    What is cash value of policy in (D) at end of 20 years?


       (2 points)

    (* 4000 character limit)

  30. Find the annual premium.


    Age and Sex


    Annual

    Face Value

    of Insured

    Type of Insurance

    Premium

    $100,000

    30M

    20-Pay Life

    C


       (2 points)

    (* 4000 character limit)

  31. Find the annual premium.


    Age and Sex


    Annual

    Face Value

    of Insured

    Type of Insurance

    Premium

    $60,000

    28M

    Straight Life

    D


       (2 points)

    (* 4000 character limit)

  32. Calculate cost of premium.

    Rating of Area

    Class

    Building

    Contents


    1

    A

    $90,000

    $30,000


       (2 points)

    (* 4000 character limit)

  33. Calculate cost of premium.

    Rating of Area

    Class

    Building

    Contents


    2

    B

    $80,000

    $50,000


       (2 points)

    (* 4000 character limit)

  34. Value of

    Amount of

    Kind of

    Actual Fire

    Amount Insurance

    Property

    Insurance

    Policy

    Loss

    Company Will Pay

    $600,000

    $400,000

    80% Coins.

    $400,000

    B


       (2 points)

    (* 4000 character limit)

  35. Annual

    Canceled

    Canceled

    Premium

    Premium

    After

    By

    Cost

    Refund

    $600

    7 months

    Insured

    A

    B


       (2 points)

    (* 4000 character limit)

  36. Using the tables in the handbook calculate Joe Brakes; auto premium

    Class 17 operator

    Optional:

    100/300 bodily

    Towing

    Compulsory

    10/20/5

    Collision

    $300 deductible

    Symbol 6,

    Age 3

    Comprehensive

    $300 deductible


    Damage to someone else's property 25 M


       (2 points)

    (* 4000 character limit)

  37. Using the tables in the handbook calculate Joe Wheel's auto premium

    Class 17 operator

    Optional:

    100/300 bodily

    Towing

    Compulsory

    10/20/5

    Collision

    $300 deductible

    Symbol 6,

    Age 3

    Comprehensive

    $300 deductible


    Damage to someone else's property 25 M


       (2 points)

    (* 4000 character limit)



  38. Class 17 operator

    Optional:

    100/300 bodily

    Towing

    Compulsory

    10/20/5

    Collision

    $300 deductible

    Symbol 6,

    Age 3

    Comprehensive

    $300 deductible


    Damage to someone else's property 25 M


    If Joe decides to decrease his deductible to $200 for collision, what additional cost will result?


       (2 points)

    (* 4000 character limit)

  39. John Davis' store is worth $400,000 and is insured for $240,000. Assuming an 80 percent coinsurance clause and a fire that caused $100,000 damage, what is the liability of the insurance company?
       (2 points)

    (* 4000 character limit)

  40. John Jay carries a $500 deductible for collision. An accident resulted in $850 worth of damage to his car. What portion will the insurance company pay?
       (2 points)

    (* 4000 character limit)



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