Name: Score:
86 Multiple choice questions
Term 1 of 86
Because Paul has a pickup truck, some friends have asked him to help move into their new
apartment. Ryan, one of his friends, is in the back of the truck unloading furniture and slips and
falls, breaking his arm. Which coverage of a personal auto policy (PAP) would cover the cost of
Ryan's subsequent emergency room bill?
Collision
Medical Payments
Liability
Comprehensive
Term 2 of 86
Choose the method of risk management that is implemented by a homeowner who installs storm
shutters.
Reduction
Retention
Transfer
Avoidance
,Term 3 of 86
Radhika, a family practice physician, owns a duplex office building in which her office takes up
one half, and she leases the other half to an accountant. Radhika has four employees but has had
trouble keeping a receptionist for more than a year. She has furnished the offices so that they
present an appropriate professional image with modern furniture, stock art on the walls, desktop
computers, and a high-end copier/scanner/printer. She also has her own X-ray machine so she
can evaluate patients who need that service quickly. Based on this information only, which of the
following should she consider to manage her property risks?
Building coverage for the entire duplex
A Commercial General Liability (CGL) policy
A Business Owner Policy (BOP)
Additional property coverage on the X-ray machine to ensure adequate coverage
I, III and IV
I and III
II only
III and IV
Term 4 of 86
Mrs. Hopkins has a major medical insurance policy with a $500 deductible and an 80%
coinsurance clause. She becomes ill and is admitted to the hospital for several days. When she is
discharged, her hospital bill is $7,500 and her doctor bills are $3,250. Calculate the amount Mrs.
Hopkins's insurance will pay.
$8,200
$9,250
$10,250
$7,000
,Term 5 of 86
Sheryl's family has a history of heart disease. She is concerned about her ability to maintain her life
insurance or to purchase more in the future in the event she develops a disabling heart problem.
Which of the following optional life insurance policy provisions would be appropriate to answer
Sheryl's concerns?
Renewability
Waiver of premium
Conversion
Guaranteed insurability
I and III
II and IV
I, II, III, and IV
I, II, and IV
Term 6 of 86
Which one of the following is an important reason for establishing an unfunded nonqualified
excess benefit plan?
To provide additional retirement benefits for highly compensated employees
To reduce the employer's current tax liability
To provide benefits for key employees in the event their employer becomes bankrupt
To provide additional retirement benefits for rank-and-file employees.
, Term 7 of 86
Which one of the following dividend options purchases a small amount of additional insurance?
Reduced premium
Accumulate at interest
Cash
Paid-up dividend additions
Term 8 of 86
Which of the following stipulations must be met for Medicare to cover the cost of long-term
care?
The care can be either skilled or unskilled.
The care can be needed either full or part time.
The need for care can be determined by the patient's family.
The patient's condition must be expected to improve.
Term 9 of 86
Which of the following statements regarding disability insurance policies is CORRECT?
An own occupation definition of disability may allow the insured to receive benefits, even if the
insured can work in another occupation.
Under a residual disability income benefit, the benefit paid is based on percentage of lost
income.
The insurance company can increase future premiums on a noncancelable disability policy.
An own occupation disability policy is the least expensive.
I, II, III, and IV
I and II
I, II, and III
IV only
86 Multiple choice questions
Term 1 of 86
Because Paul has a pickup truck, some friends have asked him to help move into their new
apartment. Ryan, one of his friends, is in the back of the truck unloading furniture and slips and
falls, breaking his arm. Which coverage of a personal auto policy (PAP) would cover the cost of
Ryan's subsequent emergency room bill?
Collision
Medical Payments
Liability
Comprehensive
Term 2 of 86
Choose the method of risk management that is implemented by a homeowner who installs storm
shutters.
Reduction
Retention
Transfer
Avoidance
,Term 3 of 86
Radhika, a family practice physician, owns a duplex office building in which her office takes up
one half, and she leases the other half to an accountant. Radhika has four employees but has had
trouble keeping a receptionist for more than a year. She has furnished the offices so that they
present an appropriate professional image with modern furniture, stock art on the walls, desktop
computers, and a high-end copier/scanner/printer. She also has her own X-ray machine so she
can evaluate patients who need that service quickly. Based on this information only, which of the
following should she consider to manage her property risks?
Building coverage for the entire duplex
A Commercial General Liability (CGL) policy
A Business Owner Policy (BOP)
Additional property coverage on the X-ray machine to ensure adequate coverage
I, III and IV
I and III
II only
III and IV
Term 4 of 86
Mrs. Hopkins has a major medical insurance policy with a $500 deductible and an 80%
coinsurance clause. She becomes ill and is admitted to the hospital for several days. When she is
discharged, her hospital bill is $7,500 and her doctor bills are $3,250. Calculate the amount Mrs.
Hopkins's insurance will pay.
$8,200
$9,250
$10,250
$7,000
,Term 5 of 86
Sheryl's family has a history of heart disease. She is concerned about her ability to maintain her life
insurance or to purchase more in the future in the event she develops a disabling heart problem.
Which of the following optional life insurance policy provisions would be appropriate to answer
Sheryl's concerns?
Renewability
Waiver of premium
Conversion
Guaranteed insurability
I and III
II and IV
I, II, III, and IV
I, II, and IV
Term 6 of 86
Which one of the following is an important reason for establishing an unfunded nonqualified
excess benefit plan?
To provide additional retirement benefits for highly compensated employees
To reduce the employer's current tax liability
To provide benefits for key employees in the event their employer becomes bankrupt
To provide additional retirement benefits for rank-and-file employees.
, Term 7 of 86
Which one of the following dividend options purchases a small amount of additional insurance?
Reduced premium
Accumulate at interest
Cash
Paid-up dividend additions
Term 8 of 86
Which of the following stipulations must be met for Medicare to cover the cost of long-term
care?
The care can be either skilled or unskilled.
The care can be needed either full or part time.
The need for care can be determined by the patient's family.
The patient's condition must be expected to improve.
Term 9 of 86
Which of the following statements regarding disability insurance policies is CORRECT?
An own occupation definition of disability may allow the insured to receive benefits, even if the
insured can work in another occupation.
Under a residual disability income benefit, the benefit paid is based on percentage of lost
income.
The insurance company can increase future premiums on a noncancelable disability policy.
An own occupation disability policy is the least expensive.
I, II, III, and IV
I and II
I, II, and III
IV only
