Deck 12: Retirement Planning

Question 1

Which of the following is not a type of hazard?

A)Physical hazard
B)Moral hazard
C)Morale hazard
D)All of the above are types of hazards
E)None of the above is a type of hazard

Answer 1

D

Question 2

What type of coverage is associated with a condominium and cooperative?

A)Basic coverage
B)Broad coverage
C)Unit owner's form
D)Contents broad form
E)None of the above

Answer 2

C

Question 3

When losses are material and there is a strong likelihood that they will occur:

A)Insurance may not be the appropriate choice
B)Insurance is always prudent
C)Overhead costs are lower
D)Insurance companies will refuse to provide insurance
E)None of the above

Answer 3

A

Question 4

Which of the following is not a method of coinsurance?

A)Instituting exclusions and waiting periods
B)Instituting risk minimization techniques
C)Prespecified limits
D)Use of group policies
E)All of the above are methods of coinsurance

Question 5

An individual is more likely to take out insurance when:

A)The individual believes that he or she is at less risk for a negative occurrence than the population at large and the insurance cost has not been raised for that increased occurrence
B)The individual believes that he or she is at less risk for a negative occurrence than the population at large and the insurance cost has been raised for that increased occurrence
C)The individual believes that he or she is at more risk for a negative occurrence than the population at large and the insurance cost has not been raised for that increased occurrence
D)The individual believes that he or she is at more risk for a negative occurrence than the population at large and the insurance cost has been raised for that increased occurrence
E)None of the above

Question 6

Real property includes:

A)Structures that are affixed to land
B)Land
C)Assets that are not affixed to land
D)All of the above
E)None of the above

Question 7

Exposure to the risk of loss is:

A)Hazard
B)Peril
C)Business risk
D)Pure risk
E)None of the above

Question 8

Which of the following is a benefit of instituting deductibles?

A)Reduced moral hazard
B)Reduced morale hazard
C)Reduced processing costs
D)All of the above
E)None of the above

Question 9

Which of the following is used to set maximum reimbursement in the event of loss of an asset that you own equal to the value of the item?

A)Indemnity
B)Screening of applicants
C)Segregation of applicants
D)Insurable interest
E)None of the above

Question 10

An individual facing risk:

A)Is unaware of the exact outcome and is unaware of the probabilities associated with alternative outcomes
B)Is unaware of the exact outcome but is aware of the probabilities associated with alternative outcomes
C)Is aware of the exact outcome
D)All of the above
E)None of the above

Question 11

Which of the following is not an example of property and liability insurance?

A)Liability to others
B)Umbrella insurance
C)Homeowner's insurance
D)All of the above are examples of property and liability insurance
E)None of the above is an example of property and liability insurance

Question 12

In which of the following cases should one purchase insurance?

A)High-severity,high-frequency
B)Low-severity,high-frequency
C)High-severity,low-frequency
D)Low-severity,low-frequency
E)None of the above

Question 13

A hazard is best defined as:

A)An increase in the probability of peril.
B)The opposite of peril
C)Uncertainty
D)All of the above
E)None of the above

Question 14

Medicaid is an example of:

A)Liability insurance
B)Government insurance
C)Property insurance
D)Personal insurance
E)None of the above

Question 15

Why are most exposures pure risks?

A)The loss of income or assets carries no reward
B)The loss of health insurance carries a reward
C)The loss of income or assets carries a reward
D)Both a and b
E)None of the above

Question 16

What is business risk?

A)A risk that carries no financial reward
B)A risk taken for financial reward.
C)The risk that the insurance company will not meet its obligations
D)The risk that the insurance holder will not meet its obligations
E)None of the above

Question 17

Which of the following is used to only allow you to insure an item when you yourself would suffer a loss should the item be damaged?

A)Indemnity
B)Screening of applicants
C)Segregation of applicants
D)Insurable interest
E)None of the above

Question 18

The actions of stockholder-owned insurance companies:

A)May conflict with the interests of policyholders
B)Never conflict with the interests of policyholders
C)Always conflict with the interests of stockholders
D)Both a and c
E)None of the above

Question 19

Which of the following homeowner's policies covers the most risk?

A)HO1
B)HO2
C)HO3
D)All of the above cover equal risk
E)None of the above

Question 20

The risk of a person behaving negligently because he or she has insurance coverage is associated with which of the following?

A)Household risk
B)Moral hazard
C)Morale hazard
D)Pure risk
E)None of the above

Question 21

Coverage of losses to you or your property directly is called:

A)First-party coverage
B)Second-party coverage
C)Third-party coverage
D)Fourth-party coverage
E)None of the above

Question 22

Which of the following equations is accurate?

A)Insurance reimbursement = amount of insurance required / amount of insurance in force)x amount of loss
B)Insurance reimbursement = amount of insurance in force / amount of loss)x amount of insurance required
C)Insurance reimbursement = amount of insurance in force / amount of insurance required)x amount of loss
D)None of the above
E)None of the above

Question 23

The minimum coverage generally associated with umbrella coverage is:

A)$250,000
B)$500,000
C)$750,000
D)$1 million.
E)There is no minimum coverage.

Question 24

Under the Consolidated Omnibus Budget Reconciliator Act of 1986,the federal government requires:

A)That people who leave positions be allowed to maintain their medical coverage for a maximum of 18 months regardless of their medical condition at the time
B)That people who leave positions be allowed to maintain their medical coverage for a maximum of 12 months regardless of their medical condition at the time
C)That people who leave positions be allowed to maintain their medical coverage for a maximum of 12 if they were in good health when leaving
D)That people who leave positions be allowed to maintain their medical coverage for a maximum of 18 months if they were in good health when leaving
E)None of the above

Question 25

Modified no-fault insurance:

A)May use the traditional tort system for cases that are not as involved and revert to no-fault for serious injuries or death
B)May use no-fault for cases that are not as involved and revert to the traditional tort system for serious injuries or death
C)May allow the insurance company to decide whether to use no-fault or the traditional tort system
D)May allow the policy holder to decide whether to use no-fault or the traditional tort system
E)None of the above

Question 26

Which of the following is not part of an automobile insurance policy?

A)Liability
B)Medical
C)Damage
D)All of the above are part of an automobile insurance policy
E)None of the above is part of an automobile insurance policy

Question 27

Depreciation is not deducted:

A)When assets are valued for loss purposes on a replacement-cost basis
B)When assets are valued for loss purposes on either an actual cash value at the time of the loss or on a replacement-cost basis
C)When assets are valued for loss purposes on an actual cash value at the time of the loss basis
D)Depreciation is always deducted
E)None of the above

Question 28

Please list the type of dwelling and type of coverage associated with the eight types of homeowner's policies.

Question 29

Which of the following is not offered by all three types of medical coverage?

A)Nonsurgical costs whether in or out of the hospital
B)A basic surgical policy to pay for the surgeon's costs,whether in or out of the hospital
C)A basic hospital policy for hospital costs such as room,board and ancillary services
D)All of the above are offered by all three types of medical coverage
E)None of the above is offered by all three types of medical coverage

Question 30

Please explain how each of the following variable factors influences long-term care insurance.
a.Age.
b.Maximum Benefit.
c.Inflation Adjustment.
d.Underwriting.
e.Reimbursement and Selection Policy.

Question 31

Which of the following statements is accurate?

A)Payments as reimbursement for property losses are not taxable
B)Payments as reimbursement for property losses are not tax deductible
C)Property losses are not tax deductible
D)All of the above
E)None of the above