Question 1

Even if the policy's requirements are met, the insured must pay long-term care expenses during waiting, or elimination period. Typical waiting periods are:

Accepted Answer

The typical waiting period for long-term care policies ranges from 90 to 100 days. This means that the insured must pay for their own long-term care expenses during this time period before the insurance policy kicks in to cover the costs.

Question 2

The amount of insurance coverage you receive depends on the type of homeowner's policy you buy. You can also obtain coverage if you're a renter or a condominium owner. The basic form(HO-1) covers perils like:

Accepted Answer

The basic form (HO-1) typically covers a range of perils, including smoke, hail, theft, vandalism, and civil commotion, among others.

Question 3

What is that form of investing in which future value and expected returns are highly uncertain?

Accepted Answer

The answer of What is that form of investing in...

Question 4

An insurance policy providing excess liability coverage for homeowner's and automobile insurance as well as additional coverage not provided by either policy is referred as:

Accepted Answer

A personal liability umbrella policy provides excess liability coverage for homeowner's and automobile insurance as well as additional coverage not provided by either policy. Captive agents represent only one insurance company, independent agents represent multiple insurance companies, and claims adjusters are responsible for investigating and settling insurance claims.

Question 5

Co-insurance is:

Accepted Answer

Co-insurance is a provision in property insurance that requires the policyholder to carry insurance equal to a specified percentage of the value of the property to receive full compensation on a loss.

Question 6

It is a contractual clause allowing the insured to continue insurance only at the insurer's option. What is it?

Accepted Answer

Optional renewability allows the insurer to decide whether or not to renew the policy when it expires. This is different from guaranteed renewability, which requires the insurer to renew the policy as long as the premiums are paid on time, and is a more favorable option for the insured. A waiting period refers to the time period between when a policy is purchased and when coverage begins, and ADL refers to Activities of Daily Living which are used to measure a person's ability to perform basic self-care tasks.

Question 7

Negligence is:

Accepted Answer

Negligence involves both failing to act in a reasonable manner and failing to take necessary steps to protect others from harm. Option C is not always necessary in a negligence case, and option D is not a common definition of negligence.

Question 8

What can be the possible strategy to avoid liability?

Accepted Answer

The answer of What can be the possible strategy to...

Question 9

_____________ is an insurance specialist who works for the insurance company as an independent adjustor or for an adjustment bureau, to investigate claims.

Accepted Answer

The answer of _____________ is an insurance specialist who works...

Question 10

Uninsured motorists insurance is fairly low in cost. Because, the cost of the coverage is low compared to the amount of protection it provides, drivers should purchase at least:

Accepted Answer

The answer of Uninsured motorists insurance is fairly low in...

Question 11

Insurance coverage that protects real and personal property from catastrophic losses caused by a variety of perils, such as fire, theft, vandalism, and windstorm is referred as:

Accepted Answer

The answer of Insurance coverage that protects real and personal...

Question 12

People often put money aside, sometimes for years, to save up enough to make just one major expenditure. Here are some common ones. Which of the following is Not out of those expenditures:

Accepted Answer

While the down payment on a home, capital for going into business, and funds for retirement are all major expenditures that people save for, a regular vacation is not typically considered in the same category. While vacations can be expensive, they are often more of a discretionary expense and not something that requires long-term savings in the same way as the other options listed.

Question 13

When a family member becomes sick for an extended period, the effect on the family goes beyond medical bills. The average chance of a person age 35 becoming disabled for 90 days or longer before 65 is about:

Accepted Answer

The average chance of a person age 35 becoming disabled for 90 days or longer before age 65 is approximately 50%.

Question 14

________ is an endorsement or policy providing either blanket or scheduled coverage of expensive personal property not adequately covered in a standard homeowner's policy.

Accepted Answer

A personal property floater is an endorsement or policy that provides either blanket or scheduled coverage of expensive personal property not adequately covered in a standard homeowner's policy. It covers items like jewelry, art, and antiques and can provide protection against loss, theft, or damage.

Question 15

__________ is a statement, preferably written, that specifies how investment capital will be invested to achieve a specific goal.

Accepted Answer

An investment plan is a statement that outlines how investment capital will be utilized to achieve a specific goal. It typically includes details on the asset allocation strategy, risk tolerance, time horizon, and other investment guidelines. The investment plan serves as a roadmap or guide for the investment decisions and helps to ensure that the investment portfolio is aligned with the investor's objectives.

Question 16

A comprehensive automobile insurance policy designed to be easily understood by the "typical" insurance purchaser is called:

Accepted Answer

The Personal Automobile Policy or PAP is a comprehensive automobile insurance policy, specifically designed for the "typical" insurance purchaser. It covers a wide range of risks associated with automobile ownership, such as liability, collision, medical payments, and uninsured/underinsured motorist coverage. The PAP is easy to understand and offers customizable coverage options for the insured.

Question 17

Many types of properties are covered by homeowner's policies. These policies also define the types of losses they cover and the persons and the locations covered. There are three types of property-related losses when misfortune occurs. Which one of the following is Not out of those losses?

Accepted Answer

Replacement cost is not a type of property-related loss. It refers to the amount of money needed to replace or repair the damaged property. The three types of losses covered by homeowner's policies are direct loss of property, indirect loss occurring due to damaged property, and additional expenses occurring due to direct and indirect losses.

Question 18

Assume that fire destroys two rooms of furniture that were 6 years old and had an estimated useful life of 10 years. The replacement cost is $5,000. Therefore at the time of loss, the furniture was subject to an assumed physical depreciation of 60%, i.e., 3,000 in this case. Because the actual cash value is estimated at $2,000. So, the maximum insurer would have to pay is:

Accepted Answer

The maximum amount the insurer would pay is the actual cash value, which is estimated at $2,000.

Question 19

What is that principle which states that an insured may not be compensated by the insurance company in an amount exceeding the insured's economic loss?

Accepted Answer

The principle of indemnity states that an insured may not be compensated by the insurance company in an amount exceeding the insured's economic loss, i.e., the amount that will restore the insured to the financial position he or she was in prior to the loss or damage. The purpose of indemnity is to prevent the insured from profiting from a loss and to discourage the insured from intentionally causing a loss in order to collect insurance proceeds.

Question 20

It is an automobile insurance that reimburses the parties involved in an accident without regard to negligence.

Accepted Answer

No-fault automobile insurance reimburses all parties involved in an accident regardless of who was at fault. This type of insurance is mandatory in some states and is designed to help reduce lawsuits and provide prompt payment for injuries and damages.

Exam 2: Certified Trust and Financial Advisor