Question 1

What amount of property insurance coverage is needed to equal 80% of the property value of a home valued at $332,000?

Accepted Answer

D

Question 2

Regional Corporation offers its employee's healthcare coverage for which they pay $85 of each employee's premium per month. The individual annual premium is $2,100. An additional $110 is added to the individual monthly premium for family coverage. What is the employee's monthly premium for individual and family health coverage?

Accepted Answer

B

Question 3

Collision insurance coverage pays for property damages that the insured causes to another vehicle in an accident.

Accepted Answer

Collision insurance coverage pays for damage to the insured's own vehicle in the event of an accident with another vehicle or object, not for damages the insured causes to another vehicle.

Question 4

What is the annual premium for a $250,000 term life insurance policy quoted at $3.10 per $1,000?

Accepted Answer

The annual premium is calculated by multiplying the rate per $1,000 by the total amount of coverage divided by 1,000. So, $3.10 * ($250,000 / $1,000) = $775.

Question 5

A deductible is the amount subtracted from an insurance settlement.

Accepted Answer

A deductible is the amount that the policyholder must pay out of pocket before the insurance company will contribute to a settlement.

Question 6

What is the annual premium for a $125,000 term life insurance policy quoted at $2.95 per $1,000?

Accepted Answer

$125,000 / $1,000 = 125
125 x $2.95 = $368.75 (annual premium)

Question 7

Frank had a car accident in which the person he hit sustained $37,000 in injuries and their car was totaled, which had a value of $32,500. Frank has 50/100/15 liability insurance. For which amount of property damages will Frank be personally liable?

Accepted Answer

Frank's insurance covers up to $15,000 in property damage. Since the total property damage is $32,500, Frank will be personally liable for the remaining $17,500.

Question 8

If a company contributes $55 to each employee's monthly healthcare insurance premium and the annual individual premium is $1,980, then the individual monthly premium is $165.

Accepted Answer

To find the individual monthly premium, we first need to divide the annual premium by 12 (since there are 12 months in a year).

$1,980 / 12 = $165

However, the company is contributing $55 towards this monthly premium, so the employee is only responsible for paying $110 per month ($165 - $55).

Question 9

Barrett Corporation has contracted with Allied Health Care for a group health insurance plan. Barrett will pay $120 of each employee's premium per month. The individual annual premium is $1,750. An additional $90 is added to the individual monthly premium for family coverage. What is the employee's monthly premium for individual and family health coverage?

Accepted Answer

The employee's monthly premium for individual coverage is $120. The employee's monthly premium for family coverage is $120 + $90 = $210.

Question 10

What amount of property insurance coverage is needed to equal 80% of the property value of a home valued at $162,000?

Accepted Answer

The answer of What amount of property insurance coverage is...

Question 11

Adrienne carries 25/50/10 liability insurance on her car. She was recently in an accident where she was at fault. The other driver, Madeleine, had $5,500 worth of personal injury and $9,500 damage to her car. Adrienne had $8,600 in damages to her car. Which will not be covered by Andrienne's insurance?

Accepted Answer

Adrienne's insurance does not cover her own property damage since 25/50/10 liability insurance only covers bodily injury and property damage to others, not the policyholder's own vehicle.

Question 12

Parker Manufacturing buys life insurance policies for their top three employees. They purchase $225,000 term policies for each employee, quoted at $3.37 per $1,000 for one year. How much will the monthly premium be for all three employees?

Accepted Answer

The total value of all three policies is:

$225,000 x 3 = $675,000

To determine the monthly premium, we need to calculate the annual premium first:

$225,000 ÷ 1,000 = 225
225 x $3.37 = $758.25
$758.25 x 3 = $2,274.75

Then, we divide the annual premium by 12 to get the monthly premium:

$2,274.75 ÷ 12 = $189.56

Therefore, the monthly premium for all three employees is $189.56, which is option B.

Question 13

Which type of insurance pays for damages to the insured person's vehicle as the result of vandalism?

Accepted Answer

Comprehensive insurance covers damages caused by non-collision incidents such as vandalism, theft, and natural disasters. Collision insurance covers damages incurred through collision with another vehicle or object. Liability insurance covers damages to the other party's vehicle and property if the insured person is at fault in an accident. Medical payments insurance covers medical expenses for the insured person and passengers in the event of an accident.

Question 14

Conway's Hardware suffers $95,000 in fire damage. The building is valued at $450,000, and the owner has it insured for $300,000 with 80% coinsurance. How much will the insurance company pay?

Accepted Answer

With 80% coinsurance, the owner is responsible for 20% of the value of the building ($450,000 x 0.20 = $90,000). Since the owner insured the building for $300,000, the insurance company will cover the remaining value of the building ($450,000 - $90,000 = $360,000). Since the fire damage is less than the value the insurance company covers, the insurance company will pay the full amount of the damage ($95,000). Therefore, the insurance company will pay $95,000.

Question 15

The policyholder is the insurance company that holds the insurance policy for a given individual or business.

Accepted Answer

The policyholder is the individual or business that holds the insurance policy, not the insurance company. The insurance company is the insurer.

Question 16

Veronica's annual healthcare premium is $1,908. Veronica pays $84 of the monthly premium. How much does Veronica's employer contribute monthly?

Accepted Answer

First, we need to find out how much Veronica pays annually: 
$84/month x 12 months = $1,008 annually

To find out how much Veronica's employer contributes annually: 
$1,908 total annual premium – $1,008 paid by Veronica = $900 annually

To find out how much Veronica's employer contributes monthly: 
$900 annually / 12 months = $75.00

Therefore, Veronica's employer contributes $75.00 per month. Answer choice B is correct.

Question 17

Term life insurance is a type of insurance policy that is limited to the life of the person for whom the policy was purchased.

Accepted Answer

Term life insurance is a type of insurance policy that provides coverage for a specified period or "term," not limited to the life of the insured. If the insured dies during the term, a death benefit is paid to the beneficiaries.

Question 18

Ridell's employer pays for $60 of his monthly premium for individual health insurance. If the individual annual insurance premium is $1,596, how much does Ridell pay each year?

Accepted Answer

First, we need to find out how much the monthly premium is:

$1,596 / 12 = $133

Then we subtract the $60 that Ridell's employer pays:

$133 - $60 = $73

So Ridell pays $73 per month for individual health insurance.

To find out how much he pays each year, we multiply that by 12:

$73 x 12 = $876

Therefore, Ridell pays $876 each year for his individual health insurance policy.

Question 19

Which is the annual premium due for homeowner's insurance on a house covered for $275,000 with a price of $6.50 per $1,000?

Accepted Answer

To calculate the annual premium, divide the coverage amount by $1,000 and then multiply by the price per $1,000. So, $275,000 / $1,000 = 275. Then, 275 * $6.50 = $1,787.50.

Question 20

The Carlisles insure their home for $190,000. The annual insurance premium is $5.95 per $1,000 of insurance. How much is the Carlisle's premium?

Accepted Answer

First, we need to calculate how much the premium is for $1,000 of insurance:

$5.95 per $1,000

Next, we can use this rate to find the premium for the Carlisle's $190,000 insurance:

($5.95 per $1,000) x 190 = $1,130.50

Therefore, the Carlisle's premium is $1,130.50, which corresponds to choice B.

Quiz 7: Insurance