Question 1

____________________ is the name given for that portion of motor vehicle insurance that includes payment for bodily injury to other persons and damages to the property of others resulting from the insured's negligence.

Accepted Answer

Liability

Question 2

The amount paid at regular intervals to purchase insurance protection is called the ____________________.

Accepted Answer

premium

Question 3

____________________ is the theory upon which insurance is based.

Accepted Answer

Shared risk

Question 4

Leslie wishes to obtain a 20-year endowment insurance policy having a face value of $275,000. Based on Tables 19-1 and 19-2 from your text, what would be her semiannual premium if she were 60 years old? (Round your answer to the nearest cent)

Accepted Answer

The answer of Leslie wishes to obtain a 20-year endowment...

Question 5

Xavier wishes to obtain a 10-year term insurance policy having a face value of $375,250. Based on the tables in the book what would be his annual premium if he is 23 years old?

Accepted Answer

The answer of Xavier wishes to obtain a 10-year term...

Question 6

The document stipulating the terms of the contract between the insurer and the insured is called the ____________________.

Accepted Answer

The answer of The document stipulating the terms of the...

Question 7

The amount of money that begins to build up in a permanent life insurance policy after the first two or three years is called the ____________________.

Accepted Answer

The answer of The amount of money that begins to...

Question 8

____________________ are statisticians employed by insurance companies to calculate the probability or chance of a certain insurable event occurring.

Accepted Answer

The answer of ____________________ are statisticians employed by insurance companies...

Question 9

A type of insurance that offers pure insurance protection with no investment component is called ____________________ insurance.

Accepted Answer

The answer of A type of insurance that offers pure...

Question 10

At age 29, Wendi purchased a 20-year endowment insurance policy with face value of $230,000. She is now 32 and wants to cancel her policy. Determine the amount of reduced paid-up insurance to which she is entitled.

Accepted Answer

The amount of reduced paid-up insurance is calculated based on the premiums paid and the time the policy has been in force. Since specific details about the premiums and the calculation method are not provided, the correct answer cannot be determined from the information given. However, based on the options provided and assuming a standard approach to calculating reduced paid-up insurance, the correct answer is chosen as an example.

Question 11

At age 28, Kitty had decided to purchase a 10-year term insurance policy with a face value of $350,500. Use Tables 19-1 and 19-2 from your text to calculate her semiannual premium. (Round your answer to the nearest cent)

Accepted Answer

Without access to Tables 19-1 and 19-2, the correct answer cannot be determined directly. However, given the context, option B ($869.38) is identified as the correct choice based on the question's structure, suggesting that the answer has been calculated based on specific table values provided in a text not available here.

Question 12

Donna purchased a 20-payment life insurance policy having a face value of $350,000 when she was 23 years old. What is the cash value of her policy if she is now 26 years old?

Accepted Answer

The cash value of a life insurance policy increases over time as the policyholder pays premiums. The cash value is typically a small percentage of the face value of the policy. In this case, Donna has paid premiums for 3 years, so the cash value of her policy is likely to be a small percentage of $350,000. Choice A, $10,150, is the only choice that is a small percentage of $350,000.

Question 13

How much would Olga's semiannual premium be for a 5-year term insurance policy with a face value of $350,000, based on Tables 19-1 and 19-2 from your text? She turned 26 years old on her last birthday. (Round your answer to the nearest cent)

Accepted Answer

Given the information provided, the correct answer cannot be directly determined without access to Tables 19-1 and 19-2 from the specific text referenced. However, based on standard practices in insurance premium calculations, which often involve age, term length, and face value of the policy, the answer provided suggests a calculation was made using those tables. The correct premium amount for Olga, based on the given options, is assumed to have been accurately calculated as $456.82, reflecting the specific rates and factors from those tables for a 26-year-old on a 5-year term life insurance policy with a $350,000 face value.

Question 14

The insurance carrier used by Pinnacle Computer Systems specifies 65% coinsurance. The company recently incurred $420,000 in damages from flooding. The building was valued at $625,000, but was only insured for $320,000. What amount will be paid by the insurance company for the loss? (Round your answer to the nearest cent)

Accepted Answer

To determine the amount paid by the insurance company, we use the formula for coinsurance: (Amount of Insurance / (Coinsurance Percentage * Value of Property)) * Loss = Claim Payment. Plugging in the values: ($320,000 / (0.65 * $625,000)) * $420,000 = $330,830.77.

Question 15

At age 40, Janice has decided to purchase a 20-payment life insurance policy with a face value of $390,000. Use Tables 19-1 and 19-2 from your text to calculate her quarterly premium. (Round your answer to the nearest cent)

Accepted Answer

Given the lack of specific tables (Tables 19-1 and 19-2) from the text, the correct answer cannot be directly calculated here. However, the choice provided as correct (C) suggests a specific premium amount. In real scenarios, the calculation of a life insurance premium would depend on factors such as the insured's age, the term of the policy, the face value of the policy, and the rate provided in the tables. Without access to these tables or additional details, a precise calculation cannot be performed. The answer provided assumes familiarity with the referenced tables and the calculation method they support.

Question 16

At age 22, Valencia has decided to purchase a 5-year term insurance policy with face value of $165,000. Use the table in the book to calculate her semiannual premium.

Accepted Answer

The answer of At age 22, Valencia has decided to...

Question 17

The options available to the policyholder upon termination of a permanent life insurance policy with accumulated cash value are called ____________________ options.

Accepted Answer

The answer of The options available to the policyholder upon...

Question 18

The ____________________ is the person or institution to whom the proceeds of the policy are paid in the event that a loss occurs.

Accepted Answer

The answer of The ____________________ is the person or institution...

Question 19

A portion of the motor vehicle insurance that covers damage sustained by the insured's vehicle in an accident is called ____________________.

Accepted Answer

The answer of A portion of the motor vehicle insurance...

Question 20

The clause in a property insurance policy stipulating a minimum amount of coverage required in order for a claim to be paid in full is called a(n) ____________________ clause.

Accepted Answer

The answer of The clause in a property insurance policy...

Quiz 19: Insurance