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Question 1 of 10
1. Question
The cafeteria plan allows employees to select among the various group life, medical expense, disability, dental, and other plans that are offered. It also allows employers to introduce new benefits to meet the specific needs of certain employees. What are the common forms of a cafeteria plan?
I. Full choice plans
II. Premium plans
III. Premium conversion plans
IV. Spending accountsCorrect
Cafeteria plans take several forms. The most common are:
(1) Full choice plans
(2) Premium conversion plan
(3) Flexible spending accounts
Although these categories are not mutually exclusive, cafeteria plans share certain common characteristics.Incorrect
Cafeteria plans take several forms. The most common are:
(1) Full choice plans
(2) Premium conversion plan
(3) Flexible spending accounts
Although these categories are not mutually exclusive, cafeteria plans share certain common characteristics. -
Question 2 of 10
2. Question
Social insurance programs are enacted to solve complex social problems. It is necessary because certain risks are difficult to insure privately. What are the basic characteristics of social insurance that distinguish them from other government insurance programs?
I. Compulsory programs
II. Floor of income
III. Full funding necessary
IV. Emphasis on social adequacy rather than individual equityCorrect
Social insurance programs in the United States have certain characteristics that distinguish them from other government insurance programs:
(1) Compulsory programs
(2) Floor of income
(3) Emphasis on social adequacy rather than individual equity
(4) Benefits loosely related to earnings
(5) Benefits prescribed by law
(6) No means test
(7) Full funding unnecessary
(8) Financially self-supportingIncorrect
Social insurance programs in the United States have certain characteristics that distinguish them from other government insurance programs:
(1) Compulsory programs
(2) Floor of income
(3) Emphasis on social adequacy rather than individual equity
(4) Benefits loosely related to earnings
(5) Benefits prescribed by law
(6) No means test
(7) Full funding unnecessary
(8) Financially self-supporting -
Question 3 of 10
3. Question
What is this type of tort, which is defined as the failure to exercise the standard of care required by law to protect others from an unreasonable risk of harm?
Correct
In the law of negligence, your actions are compared with the actions of a reasonably prudent person under the same circumstances. If your conduct and behavior are below the standard of care required of a prudent person, you may be found negligent.
Incorrect
In the law of negligence, your actions are compared with the actions of a reasonably prudent person under the same circumstances. If your conduct and behavior are below the standard of care required of a prudent person, you may be found negligent.
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Question 4 of 10
4. Question
An unsatisfied judgment fund is a state fund for compensating auto accident victims who have exhausted all other means of recovery. What are the common characteristics of an unsatisfied judgment fund?
I. The accident victim must obtain a judgment against the negligent motorist and must show that the judgment cannot be collected
II. The accident victims may not be fully indemnified for their injuries
III. There is no guarantee that all accident victims will be paid
IV. The maximum amount paid by the fund generally is the limits specified in the state’s compulsory insurance law. The amount paid may also be reduced by collateral sources of recovery, such as worker’s compensation benefitsCorrect
The common characteristics of an unsatisfied judgment fund include the following:
(1) The accident victim must obtain a judgment against the negligent motorist and must show that the judgment cannot be collected.
(2) The maximum amount paid by the fund generally is the limits specified in the state’s compulsory insurance law. The amount paid may also be reduced by collateral sources of recovery, such as worker’s compensation benefits.
(3) The negligent driver is not relieved of legal responsibility when the fund makes a payment to the accident victim. Negligent drivers must repay the fund or lose their driver’s license until the fund is reimbursed for the payments.Incorrect
The common characteristics of an unsatisfied judgment fund include the following:
(1) The accident victim must obtain a judgment against the negligent motorist and must show that the judgment cannot be collected.
(2) The maximum amount paid by the fund generally is the limits specified in the state’s compulsory insurance law. The amount paid may also be reduced by collateral sources of recovery, such as worker’s compensation benefits.
(3) The negligent driver is not relieved of legal responsibility when the fund makes a payment to the accident victim. Negligent drivers must repay the fund or lose their driver’s license until the fund is reimbursed for the payments. -
Question 5 of 10
5. Question
What is this type of coverage, wherein the insured agrees to insure the home to 100% of its estimated replacement cost rather than 80%?
Correct
In a guaranteed replacement cost, if a total loss occurs, the insurer agrees to replace the home exactly as it was before the loss, even if the replacement cost exceeds the amount of insurance stated in the policy.
Incorrect
In a guaranteed replacement cost, if a total loss occurs, the insurer agrees to replace the home exactly as it was before the loss, even if the replacement cost exceeds the amount of insurance stated in the policy.
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Question 6 of 10
6. Question
A package policy is one that combines two or more coverage into a single policy. Under the ISO program, what are the forms included in a commercial package policy?
I. A common policy declarations page
II. A common policy contract page
III. A common policy conditions page
IV. One or more survey formsCorrect
Under the ISO program, each commercial package policy contains the following:
(1) A common policy declarations page that shows the name and address of the insured, the policy period, a description of the insured property, a list of coverage parts that apply, and the premium amount.
(2) A common policy conditions page that applies to all commercial lines of insurance.
(3) Two or more coverage forms.Incorrect
Under the ISO program, each commercial package policy contains the following:
(1) A common policy declarations page that shows the name and address of the insured, the policy period, a description of the insured property, a list of coverage parts that apply, and the premium amount.
(2) A common policy conditions page that applies to all commercial lines of insurance.
(3) Two or more coverage forms. -
Question 7 of 10
7. Question
What is this type of insurance that provides protection against catastrophic liability judgments that might otherwise bankrupt a firm?
Correct
Under the commercial umbrella policy, firms that were sued for large amounts may seek protection against catastrophic loss exposures not adequately insured under general liability policies. The commercial umbrella policy pays the ultimate net loss over the retained limit for bodily injury, property damage, and personal and advertising injury to which the insurance applies.
Incorrect
Under the commercial umbrella policy, firms that were sued for large amounts may seek protection against catastrophic loss exposures not adequately insured under general liability policies. The commercial umbrella policy pays the ultimate net loss over the retained limit for bodily injury, property damage, and personal and advertising injury to which the insurance applies.
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Question 8 of 10
8. Question
A waiver-of-premium provision means that if the insured becomes totally disabled from bodily injury or disease before some stated age, all premiums coming due during the period of disability are waived. What are the requirements that must be met before any premiums are waived?
I. Become disabled before some stated age, such as before age 60 or 65
II. Be continuously disabled for 6 months
III. Satisfy the definition of total disability
IV. Submit a written request to the insurerCorrect
Before any premiums are waived, the insured must meet the following requirements:
(1) Become disabled before some stated age, such as before age 60 or 65.
(2) Be continuously disabled for 6 months.
(3) Satisfy the definition of total disability.
(4) Furnish proof of disability satisfactory to the insurer.Incorrect
Before any premiums are waived, the insured must meet the following requirements:
(1) Become disabled before some stated age, such as before age 60 or 65.
(2) Be continuously disabled for 6 months.
(3) Satisfy the definition of total disability.
(4) Furnish proof of disability satisfactory to the insurer. -
Question 9 of 10
9. Question
What is defined as the difference between the present value of future benefits and the present value of future net premiums?
Correct
Policy reserves, also known as legal reserves, can be defined as a liability item on the insurer’s balance sheet that must be offset by assets equal to that amount.
Incorrect
Policy reserves, also known as legal reserves, can be defined as a liability item on the insurer’s balance sheet that must be offset by assets equal to that amount.
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Question 10 of 10
10. Question
Collision is defined as the upset of your covered auto or non-owned auto or its impact with another vehicle or object. What are the examples of a collision loss?
I. You lose control of your car on an icy road, and it overturns
II. Contact with a bird or animal
III. Your car hits another car, a telephone pole, a tree, or a building
IV. Malicious mischief or vandalismCorrect
Collision losses are paid regardless of fault. If you cause the accident, your insurer will pay for the damage to your car, less any deductible. If the other driver damages your car, you can either collect from the negligent driver or look to your insurer to pay the claim. If you collect from your insurer, you must give up subrogation rights to your insurer, who will then attempt to collect from the negligent party who caused the accident. If the entire amount of the loss is recovered, your insurer will refund the deductible.
Other examples of collision loss include the following:
(1) Your car is parked, and you find the rear fender dented when you return.
(2) You open your car door in a parking lot, and the door is damaged when it hits the vehicle parked next to you.Incorrect
Collision losses are paid regardless of fault. If you cause the accident, your insurer will pay for the damage to your car, less any deductible. If the other driver damages your car, you can either collect from the negligent driver or look to your insurer to pay the claim. If you collect from your insurer, you must give up subrogation rights to your insurer, who will then attempt to collect from the negligent party who caused the accident. If the entire amount of the loss is recovered, your insurer will refund the deductible.
Other examples of collision loss include the following:
(1) Your car is parked, and you find the rear fender dented when you return.
(2) You open your car door in a parking lot, and the door is damaged when it hits the vehicle parked next to you.