Question 1

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

False

Question 2

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

To find out how much Veronica's employer contributes monthly, we need to subtract what Veronica pays per month from the total annual premium, and then divide by 12 (months in a year).

$1,908 (annual premium) - $84 (Veronica's monthly contribution) = $1,824 (total employer contribution for the year)
$1,824 ÷ 12 (months) = $152 (monthly contribution from employer)

Therefore, the correct answer is B, $75.00, which is the closest option to $152 (monthly contribution from employer).

Question 3

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 itself.

Question 4

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 Ridell's monthly premium is without the employer's contribution.
$1,596 (annual premium)/12 (months) = $133 (monthly premium)
Then we subtract the $60 that his employer pays:
$133 (monthly premium) - $60 (employer contribution) = $73 (Ridell's monthly premium)
Finally, we multiply Ridell's monthly premium by 12 to find out how much he pays each year:
$73 (monthly premium) * 12 (months) = $876 (Ridell's annual cost)

Question 5

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

To find the premium, multiply the insurance amount by the rate:
$190,000 x ($5.95/$1,000) = $1,130.50.

Question 6

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 7

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 8

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 9

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 10

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

The answer of Regional Corporation offers its employee's healthcare coverage...

Question 11

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 answer of Barrett Corporation has contracted with Allied Health...

Question 12

A deductible is the amount subtracted from an insurance settlement.

Accepted Answer

A deductible is an amount that the policyholder has to pay out of pocket before the insurance company pays out on a claim. It is subtracted from the total insurance settlement.

Question 13

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

Accepted Answer

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

Question 14

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

The answer of Frank had a car accident in which...

Question 15

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 calculate the monthly premium, we can divide the annual premium by 12 months:

$1,980 / 12 = $165

However, if the company is contributing $55 per month, the employee would only be responsible for paying:

$165 - $55 = $110

Therefore, the company contribution reduces the individual monthly premium to $110, not $165.

Question 16

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 17

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

To calculate the insurance company's payment, first we need to determine if the owner met the coinsurance requirement. The coinsurance requirement is calculated by multiplying the building's value by the coinsurance percentage, which in this case is 80%:
$450,000 x 80% = $360,000

Since the owner's insurance coverage ($300,000) is less than the coinsurance requirement ($360,000), the owner is considered underinsured. Therefore, the insurance company will only pay a portion of the claim based on the following formula:

Insurance company payment = (Amount of insurance carried / Amount of insurance required) x Loss

Insurance company payment = ($300,000 / $360,000) x $95,000
Insurance company payment = 0.833 x $95,000
Insurance company payment = $78,850

Therefore, the insurance company will pay $78,850 towards the fire damage.

Question 18

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

Accepted Answer

To calculate the annual premium for the term life insurance policy, we need to multiply the face value ($125,000) by the rate per $1,000 ($2.95) and divide the result by 1000:

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

Therefore, the annual premium for the $125,000 term life insurance policy is $368.75. Choice B is the correct answer.

Question 19

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 20

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

Accepted Answer

Comprehensive insurance covers damages to the insured person's vehicle as the result of vandalism. Collision insurance covers damages to the insured person's vehicle as the result of a collision. Liability coverage pays for damages that the insured person is legally responsible for. Medical payments coverage pays for the medical expenses of the insured person and their passengers in the event of an accident.

Quiz 7: Insurance

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

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

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

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?

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?

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

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?

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?

A deductible is the amount subtracted from an insurance settlement.

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

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?

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.

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

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?

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

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

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