Question 1

Insurance is defined as a contract in which the insured party makes payments to the insurer in exchange for the insurer's promise to make payment or transfer goods to another party in the event of injury or destruction to the insured party's property or life.

Accepted Answer

A) True 
 B)False

Question 2

________ is the transfer and distribution of risk.

Accepted Answer

A)   Property management
B)   Distributive lost
C)   Insurance benefit
D)   Risk management
E)   Casualty managementF) None of the above
G) C) and E)

Question 3

If the insured misrepresented his or her health on the insurance application, what is the result when the insured dies and his or her beneficiary seeks payment?

Accepted Answer

A)   The beneficiary will not receive payment because the policy is void.
B)   The beneficiary will not receive payment because the insured breached the contract.
C)   The beneficiary will receive the full amount of payment.
D)   The beneficiary will receive an adjusted payment to reflect premiums for the correct health.
E)   The beneficiary will receive an adjusted payment to reflect the insurer's damages.F) B) and C)
G) A) and E)

Question 4

Which of the following prevents an insurer from denying payment because it decides to investigate the application for fraud?

Accepted Answer

A)   Arbitration clause
B)   Investigation clause
C)   Antilapse clause
D)   Incontestability clause
E)   Appraisal clauseF) B) and E)
G) A) and B)

Question 5

A policy of title insurance is an example of which of the following types of insurance?

Accepted Answer

A)   Business loss
B)   Profit loss
C)   Commercial
D)   Economy
E)   EconomicF) None of the above
G) B) and D)

Question 6

What does a co-payment or deductible incentivize an individual to do?

Accepted Answer

A)   Pay for a higher coverage amount.
B)   Pay a lower premium.
C)   Refrain from making claims.
D)   Decrease the number of insurance policies an insured has.
E)   Shop around for the best coverage.F) A) and B)
G) A) and C)

Question 7

Which of the following types of liability insurance protects a garage owner from liability to persons injured by the operation of the garage?

Accepted Answer

A)   Contractors' Liability Insurance
B)   Product Liability Insurance
C)   Garage Liability Insurance
D)   Professional Liability Insurance
E)   Fire InsuranceF) B) and E)
G) A) and E)

Question 8

What is an arbitration clause and what does it help do?

Accepted Answer

Some insurance contracts include clauses...

Question 9

A commercial general liability policy provides protection against intentional wrongful acts committed by an insured.

Accepted Answer

A) True 
 B)False

Question 10

The beneficiary is another name for the insured in an insurance contract.

Accepted Answer

A) True 
 B)False

Question 11

In which of the following circumstances can an insurer void an insurance contract?

Accepted Answer

A)   The insured made material misrepresentations in the insurance application and if the insurer would have known of these material representations, it would have rejected the application.
B)   The insured made material misrepresentations in the insurance application, regardless if the misrepresentation would have altered the insurer's decision to issue the policy.
C)   The insured failed to disclose any fact; material or nonmaterial, on the insurance application and the insurer relied on the information contained in the application when it issued the policy.
D)   The insured made material misrepresentations in the insurance application, but the insurer knew these representations were likely false when it issued the policy.
E)   The insured made material misrepresentations in the insurance application, but the insurer did not rely on these representations when it issued the policy.F) A) and B)
G) A) and C)

Question 12

Which one of the following is not an example of a type of liability insurance?

Accepted Answer

A)   Contractors'
B)   Garage
C)   Product liability
D)   Professional
E)   WeatherF) B) and E)
G) A) and B)

Question 13

The ________ type of life insurance provides protection for the entire life of the insured and has a cash-surrender value.

Accepted Answer

A)   Whole-life
B)   Term-life
C)   Surrender-life
D)   Useful-life
E)   Entire-lifeF) A) and C)
G) D) and E)

Question 14

Insurance policies can be cancelled according to state laws not federal laws.

Accepted Answer

A) True 
 B)False

Question 15

The insured party transfers his or her risk of loss of property or life to the insurance company through the insurance agreement.

Accepted Answer

A) True 
 B)False

Question 16

What type of insurance is purchased by neither the insured party nor the insurer?

Accepted Answer

A)   Individual
B)   Commercial
C)   Group
D)   Personal
E)   CasualtyF) A) and B)
G) A) and C)

Question 17

What type of agreement is usually put in place as temporary insurance while the company determines whether to accept or reject an insurance application?

Accepted Answer

A)   Temporary plan
B)   Binder agreement
C)   Preauthorization agreement
D)   Prebinding agreement
E)   Preemptive agreementF) B) and D)
G) A) and C)

Question 18

[Insurance Incident] Ace Photo, a company specializing in wild animal photography, took out a life insurance policy through ABC Insurance on its president, Ringo, and an insurance policy on the company-owned jeep that he drove. Some time later, Ringo got a better offer from Flash Company, another company specializing in the photography of wild animals, and went to work for them. He parted on good terms with Ace Photo, and took the jeep under the mistaken idea that it was part of his severance benefits. Neither of the insurance policies was cancelled by Ace Photo. Unfortunately, while photographing a lion for Flash Company, Ringo was attacked and eaten. His jeep was then stolen by a bystander. Ace Photo had been in the process of contacting Ringo in an attempt to obtain possession of the jeep but had not reacquired it at the time of his death. Ace Photo had renewed the policy on the jeep, reaffirming to the insurer that its purpose was for use by Ace Photo employees because Ace Photo planned to have possession of the vehicle shortly. Ace Photo filed a claim to collect on the life insurance policy and also on the vehicle policy. ABC Insurance denied both claims.
-Regarding whether ABC Insurance will be required to provide coverage on the jeep, which of the following is true?

Accepted Answer

A)   ABC will likely not be required to provide coverage on the jeep because Ace Photo made material misrepresentations in the renewal of the policy that would have prevented its renewal.
B)   ABC will likely be required to provide coverage on the jeep because any misrepresentations made were innocently made in the belief that the jeep would be returned soon.
C)   ABC will not have to provide coverage because Ace Photo did not have an insurable interest in the jeep.
D)   ABC will have to provide coverage unless Ringo had already obtained his own insurance on the vehicle because one vehicle may only be insured under one policy.
E)   ABC will not likely be required to provide coverage because Ringo's new employer was liable under workers' compensation.F) A) and B)
G) A) and C)

Question 19

Businesses generally carry ________, a policy that covers some of type of business risk.

Accepted Answer

A)   loss prevention insurance
B)   lost profit insurance
C)   commercial insurance
D)   economic harm insurance
E)   risk aversion insuranceF) B) and E)
G) A) and C)

Question 20

Which of the following acts would not be covered under a commercial general liability policy?

Accepted Answer

A)   A customer's personal injury claim
B)   An employee's intentional tortious act
C)   A competitor's patent claim
D)   A competitor's copyright claim
E)   A competitor's trademark claimF) None of the above
G) C) and D)

Exam 51: Insurance Law

The ________ type of life insurance provides protection for the entire life of the insured and has a cash-surrender value.

Correct Answer
verified

The beneficiary is another name for the insured in an insurance contract.

Correct Answer
verified

Insurance policies can be cancelled according to state laws not federal laws.

Correct Answer
verified

Which of the following types of liability insurance protects a garage owner from liability to persons injured by the operation of the garage?

Correct Answer
verified

In which of the following circumstances can an insurer void an insurance contract?

Correct Answer
verified

What type of agreement is usually put in place as temporary insurance while the company determines whether to accept or reject an insurance application?

Correct Answer
verified

Which of the following acts would not be covered under a commercial general liability policy?

Correct Answer
verified

Correct Answer
verified

What does a co-payment or deductible incentivize an individual to do?

Correct Answer
verified

Which one of the following is not an example of a type of liability insurance?

Correct Answer
verified

The insured party transfers his or her risk of loss of property or life to the insurance company through the insurance agreement.

Correct Answer
verified

A commercial general liability policy provides protection against intentional wrongful acts committed by an insured.

Correct Answer
verified

A policy of title insurance is an example of which of the following types of insurance?

Correct Answer
verified

What is an arbitration clause and what does it help do?

Correct Answer
verified
Some insurance contracts include clauses...
View Answer

Businesses generally carry ________, a policy that covers some of type of business risk.

Correct Answer
verified

________ is the transfer and distribution of risk.

Correct Answer
verified

Which of the following prevents an insurer from denying payment because it decides to investigate the application for fraud?

Correct Answer
verified

Insurance is defined as a contract in which the insured party makes payments to the insurer in exchange for the insurer's promise to make payment or transfer goods to another party in the event of injury or destruction to the insured party's property or life.

Correct Answer
verified

If the insured misrepresented his or her health on the insurance application, what is the result when the insured dies and his or her beneficiary seeks payment?

Correct Answer
verified

What type of insurance is purchased by neither the insured party nor the insurer?

Correct Answer
verified

Exam 51: Insurance Law

The ________ type of life insurance provides protection for the entire life of the insured and has a cash-surrender value.

Correct AnswerverifiedShow Answer

The beneficiary is another name for the insured in an insurance contract.

Correct AnswerverifiedShow Answer

Insurance policies can be cancelled according to state laws not federal laws.

Correct AnswerverifiedShow Answer

Which of the following types of liability insurance protects a garage owner from liability to persons injured by the operation of the garage?

Correct AnswerverifiedShow Answer

In which of the following circumstances can an insurer void an insurance contract?

Correct AnswerverifiedShow Answer

What type of agreement is usually put in place as temporary insurance while the company determines whether to accept or reject an insurance application?

Correct AnswerverifiedShow Answer

Which of the following acts would not be covered under a commercial general liability policy?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

What does a co-payment or deductible incentivize an individual to do?

Correct AnswerverifiedShow Answer

Which one of the following is not an example of a type of liability insurance?

Correct AnswerverifiedShow Answer

The insured party transfers his or her risk of loss of property or life to the insurance company through the insurance agreement.

Correct AnswerverifiedShow Answer

A commercial general liability policy provides protection against intentional wrongful acts committed by an insured.

Correct AnswerverifiedShow Answer

A policy of title insurance is an example of which of the following types of insurance?

Correct AnswerverifiedShow Answer

What is an arbitration clause and what does it help do?

Correct AnswerverifiedSome insurance contracts include clauses...View AnswerShow Answer

Businesses generally carry ________, a policy that covers some of type of business risk.

Correct AnswerverifiedShow Answer

________ is the transfer and distribution of risk.

Correct AnswerverifiedShow Answer

Which of the following prevents an insurer from denying payment because it decides to investigate the application for fraud?

Correct AnswerverifiedShow Answer

Insurance is defined as a contract in which the insured party makes payments to the insurer in exchange for the insurer's promise to make payment or transfer goods to another party in the event of injury or destruction to the insured party's property or life.

Correct AnswerverifiedShow Answer

If the insured misrepresented his or her health on the insurance application, what is the result when the insured dies and his or her beneficiary seeks payment?

Correct AnswerverifiedShow Answer

What type of insurance is purchased by neither the insured party nor the insurer?

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Some insurance contracts include clauses...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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