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Question 1 of 10
1. Question
Social insurance benefits are the predominant source of income for the majority of retired in the United States. What are the advantages of social insurance in society?
I. Social insurance programs are enacted to solve complex social problems
II. Social insurance programs are necessary because certain risks are easy to insure privately
III. Social insurance programs provide a base of economic security to the population
IV. Social insurance programs are enacted to identify simple social problemsCorrect
Although the United States has a highly developed system of private insurance, social insurance programs are necessary for several reasons:
(1) Social insurance programs are enacted to solve complex social problems.
(2) Social insurance programs are necessary because certain risks are difficult to insure privately.
(3) Social insurance programs provide a base of economic security to the population.Incorrect
Although the United States has a highly developed system of private insurance, social insurance programs are necessary for several reasons:
(1) Social insurance programs are enacted to solve complex social problems.
(2) Social insurance programs are necessary because certain risks are difficult to insure privately.
(3) Social insurance programs provide a base of economic security to the population. -
Question 2 of 10
2. Question
The Old-age, Survivors, and Disability Insurance (OASDI), commonly known as Social Security, is the most important social insurance program in the United States. To become eligible for the various benefits of Social Security, you must attain an insured status. What are the types of insured status?
I. Fully insured
II. Currently insured
III. Partly insured
IV. Disability insuredCorrect
To become eligible for the various benefits of Social Security, you must attain an insured status.
There are three types of insured status:
(1) You are fully insured for retirement benefits if you have 40 credits. However, for people born before 1929, fewer credits are required.
(2) You are currently insured if you have earned at least six credits during the last 13 calendar quarters ending with the quarter of death, disability, or entitlement to retirement benefits.
(3) You must meet two work test to be disability insured: (a) a recent work test and (b) a duration of work test. The number of credits required to meet the recent work test depends on your age when you become disabled.Incorrect
To become eligible for the various benefits of Social Security, you must attain an insured status.
There are three types of insured status:
(1) You are fully insured for retirement benefits if you have 40 credits. However, for people born before 1929, fewer credits are required.
(2) You are currently insured if you have earned at least six credits during the last 13 calendar quarters ending with the quarter of death, disability, or entitlement to retirement benefits.
(3) You must meet two work test to be disability insured: (a) a recent work test and (b) a duration of work test. The number of credits required to meet the recent work test depends on your age when you become disabled. -
Question 3 of 10
3. Question
A tort is a legal wrong for which the law allows a remedy in the form of money damages. The person who is injured or harmed by the actions of another party or defendant can sue for damages. Which of the following are categories of tort?
I. Intentional tort
II. Strict liability
III. Fraud
IV. TheftCorrect
Torts generally can be classified into three categories:
(1) Legal liability can arise from an intentional act or omission that results in harm or injury to another person or damage to the person’s property.
(2) Strict liability means that liability is imposed regardless of negligence or fault.
(3) Negligence is another type of tort that can result in substantial liability. Because negligence is so important in liability insurance, it merits special attention, knowledge, and judgment of the claimant and tortfeasor; the seriousness of the harm; and a host of additional factors.Incorrect
Torts generally can be classified into three categories:
(1) Legal liability can arise from an intentional act or omission that results in harm or injury to another person or damage to the person’s property.
(2) Strict liability means that liability is imposed regardless of negligence or fault.
(3) Negligence is another type of tort that can result in substantial liability. Because negligence is so important in liability insurance, it merits special attention, knowledge, and judgment of the claimant and tortfeasor; the seriousness of the harm; and a host of additional factors. -
Question 4 of 10
4. Question
What is this type of legal defense against negligence, wherein the law allows an injured person to recover damages even though he or she has contributed to the injury?
Correct
Under comparative negligence law, if both the plaintiff and the defendant contributed to the plaintiff’s injury, the financial burden of the injury is shared by both parties according to their respective degrees of fault.
Incorrect
Under comparative negligence law, if both the plaintiff and the defendant contributed to the plaintiff’s injury, the financial burden of the injury is shared by both parties according to their respective degrees of fault.
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Question 5 of 10
5. Question
What is this law, wherein proof of financial responsibility is not required until after the driver has his or her first accident or until after the conviction for certain offenses, such as driving under the influence of alcohol?
Correct
Evidence of financial responsibility can be provided by producing evidence of an auto insurance policy with at least certain minimum liability limits, such as $25,000/$50,000. Other ways in which the financial responsibility law can be satisfied are by posting a bond, by depositing securities or money in the amount required by law, or by showing that the person is a qualified self-insurer.
Incorrect
Evidence of financial responsibility can be provided by producing evidence of an auto insurance policy with at least certain minimum liability limits, such as $25,000/$50,000. Other ways in which the financial responsibility law can be satisfied are by posting a bond, by depositing securities or money in the amount required by law, or by showing that the person is a qualified self-insurer.
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Question 6 of 10
6. Question
What is this type of auto insurance, which provides minimum amounts of liability insurance at reduced rates to motorists who cannot afford regular insurance or have limited financial assets to protect?
Correct
An example of low-cost auto insurance is California’s low-cost plan, which is available to low-income drivers over the age of 19 who have a good driving record. Rates are determined on a county basis, and drivers may purchase up to $10,000 per person in liability coverage with $20,000 available per accident.
Incorrect
An example of low-cost auto insurance is California’s low-cost plan, which is available to low-income drivers over the age of 19 who have a good driving record. Rates are determined on a county basis, and drivers may purchase up to $10,000 per person in liability coverage with $20,000 available per accident.
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Question 7 of 10
7. Question
What is this type of insurer, which specializes in insuring motorists who have been canceled or refused insurance, teenage drivers, and drivers convicted of drunk driving?
Correct
Specialty insurers are insurers that specialize in insuring motorists with poor driving records. The premiums are substantially higher than premiums charged in the standard market. The actual premium paid is based on the individual’s driving record, typically over the past 3 years. The higher the number of chargeable accidents or moving vehicle traffic violations, the higher the premium charged.
Incorrect
Specialty insurers are insurers that specialize in insuring motorists with poor driving records. The premiums are substantially higher than premiums charged in the standard market. The actual premium paid is based on the individual’s driving record, typically over the past 3 years. The higher the number of chargeable accidents or moving vehicle traffic violations, the higher the premium charged.
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Question 8 of 10
8. Question
What is this type of insurance, which protects an insured when a claim or suit for damages is brought because of bodily injury or property damage allegedly caused by an insured’s negligence?
Correct
Personal liability insurance protects the named insured and family members against legal liability arising out of their personal acts. The insurer will provide legal defense and pay those sums that an insured is legally obligated to pay up to the policy limit.
Incorrect
Personal liability insurance protects the named insured and family members against legal liability arising out of their personal acts. The insurer will provide legal defense and pay those sums that an insured is legally obligated to pay up to the policy limit.
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Question 9 of 10
9. Question
Under the ISO program, mobile home insurance is written by adding an endorsement to either a Homeowners 2 or Homeowners 3 policy, which tailors the homeowner’s policy to meet the special characteristics of mobile homes. What are the eligibility requirements for mobile home insurance?
I. An eligible mobile home typically must be at least 50 feet wide and 100 feet long
II. It must be designed for portability
III. It must be designed for year-round living
IV. An eligible mobile home typically must be at least 10 feet wide and 40 feet longCorrect
An eligible mobile home typically must be at least 10 feet wide and 40 feet long, must be designed for portability and must be designed for year-round living. Although portable, mobile homes are normally placed on a foundation and not moved from location to location. These requirements are imposed to eliminate coverage for camper trailers pulled by autos and insured under auto insurance policies.
Incorrect
An eligible mobile home typically must be at least 10 feet wide and 40 feet long, must be designed for portability and must be designed for year-round living. Although portable, mobile homes are normally placed on a foundation and not moved from location to location. These requirements are imposed to eliminate coverage for camper trailers pulled by autos and insured under auto insurance policies.
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Question 10 of 10
10. Question
Title insurance protects the owner of the property and/or the lender of money for the purchase of property against any unknown defects in the title to the property under consideration. Which of the following are characteristics of title insurance?
I. The policy provides protection against property defects that have occurred in the past, before the effective date of the policy
II. The policy is written by the insurer based on the assumption that no losses will occur
III. The premium is paid before the policy is issued
IV. The policy term runs indefinitely into the futureCorrect
Title insurance policies have certain characteristics that distinguish them from other contracts:
(1) The policy provides protection against title defects that have occurred in the past, before the effective date of the policy.
(2) The policy is written by the insurer based on the assumption that no losses will occur.
(3) The premium is paid only once when the policy is issued.
(4) The policy term runs indefinitely into the future.
(5) If a loss occurs, the insured is indemnified in dollar amounts up to the policy limits.Incorrect
Title insurance policies have certain characteristics that distinguish them from other contracts:
(1) The policy provides protection against title defects that have occurred in the past, before the effective date of the policy.
(2) The policy is written by the insurer based on the assumption that no losses will occur.
(3) The premium is paid only once when the policy is issued.
(4) The policy term runs indefinitely into the future.
(5) If a loss occurs, the insured is indemnified in dollar amounts up to the policy limits.