Liberty
University BUSI 352 quiz 3 solutions answers right
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many versions: 2 versions
Question 1 Nathan, age 35, came into your
office today. He has been a client of yours for a long time. He has neglected
his insurance portfolio up until this point and wants to complete the personal
risk management process. Together you determine that his insurance objective is
to “insure, in the most economical way, only those risks that have the
potential of causing catastrophic financial loss.” You also identified all of
the possible risk exposures. In evaluating these risks, which of the following
is true?
Question 2 If a risk has a high frequency
of occurrence and a high severity, you should:
Question 3 You recently met with your
client, Don, age 40. Don is widowed and has one dependent child. During your
meeting with him, you discussed the concept of risk management. Which of the
following statements regarding the ways to manage risk is incorrect?
Question 4 Zach and Laura recently
purchased a new home. They came to your office to ask several questions about
their homeowner’s policy. Which of the following is true regarding homeowners
insurance?
Question 5 Tom is interested in purchasing
a personal liability umbrella policy (PLUP). He has asked you to educate him on
this type of policy. Which of the following is true?
Question 6 Which of the following is not a
methodology used to determine the amount of necessary life insurance?
Question 7 During your recent meeting with
Ron, a new client, you discussed the concept of risk. You defined several terms
for Ron. Which of the following terms is defined as the possibility of loss,
but no possibility of gain?
Question 8 Jim’s car was totaled in a
wreck. He failed to yield to oncoming traffic, and Jim was found to be at
fault. The driver of the car he hit did not have insurance. Jim’s own car
insurance policy reimbursed him for the property damage to his own vehicle.
What type of coverage would pay for this?
Question 9 An HO3 policy (“open perils”
except those specifically excluded) with no endorsements excludes which one of
the following perils?
Question 10 In order to have an insurable
risk, all of the following must be present except?
Question 11 Julie is a doctor who specializes
in performing heart surgery on babies. She has a longterm disability policy
that covers her in the event that she can no longer perform this type of
surgery due to disability. What type of longterm disability insurance policy
does she have?
Question 12 Which of the following is not a
response to a perceived risk?
Question 13 When fine arts or gun
collections are insured under a homeowner’s policy by endorsement,
Question 14 Which of the following
statements regarding life insurance needs are correct? 1: The human value
approach looks forward for information. 2: The capitalization of income
approach looks at right now only for information. 3: The needs approach looks
at future needs of dependents but does not consider the estate that the decedent
would have built had he lived.
Question 15 You recently met with your
client, Tripp, to discuss his insurance policies. Tripp was reading a book on
contracts and wanted to know how his insurance contract related to the material
he was reading and to his circumstances. During your conversation, Tripp made
several statements to clarify that he understood insurance. Which of the
following statements would you have told him was incorrect?
· Question 1
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When
fine arts or gun collections are insured under a homeowner’s policy by
endorsement,
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· Question 2
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B.J.
leaves his garage door open during the day because he knows he has property
insurance, and he is lazy. One day, someone steals his new truck from his
garage. Leaving the garage door open is an example of:
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· Question 3
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Which
of the following statements is/are correct?
1: The cause of a loss is a peril. 2: A hazard is a condition that increases the probability of a loss occurring. |
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· Question 4
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Joe
wants to purchase a life insurance policy on his own life. He is interested
in learning about the various approaches to determine the amount needed.
Which of the following is not true regarding the three most common
approaches?
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· Question 5
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In
order to have an insurable risk, all of the following must be present except?
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· Question 6
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Erin
purchased a life insurance policy on her own life. Her husband, Mike, is the
beneficiary of the policy. Which of the following is not a necessary legal
element of the contract?
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· Question 7
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All
of the following are needed to calculate the client’s human life value
except:
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· Question 8
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Term
life insurance is considered “pure insurance.”
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· Question 9
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Tom
is interested in purchasing a personal liability umbrella policy (PLUP). He
has asked you to educate him on this type of policy. Which of the following
is true?
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· Question 10
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Which
of the following is not a response to a perceived risk?
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· Question 11
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Which
of the following is true regarding the financial needs method used to
determine life insurance needs?
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· Question 12
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Jim’s
car was totaled in a wreck. He failed to yield to oncoming traffic, and Jim
was found to be at fault. The driver of the car he hit did not have insurance.
Jim’s own car insurance policy reimbursed him for the property damage to his
own vehicle. What type of coverage would pay for this?
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· Question 13
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An
HO-3 policy (“open perils” except those specifically excluded) with no
endorsements excludes which one of the following perils?
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· Question 14
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Ginny
and Max own a rental home on the Gulf Coast. They insured their property with
their local insurance company. The policy provides protection against losses
caused by perils that are specifically listed as covered in the policy. What
type of policy do they have?
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· Question 15
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Conditions
that increase either the frequency or severity of loss are called:
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Which of the following would not be
considered a personal risk?
Ginny and Max own a rental home on the Gulf
Coast. They insured their property with their local insurance company. The
policy provides protection against losses caused by perils that are
specifically listed as covered in the policy. What type of policy do they have?
Jennifer had a very bad year. She wrecked
her car in January when she ran a red light (because she could not see properly
having left her contacts at home) and crashed into another car completely
destroying both cars. The insurance company was very nice to her and she
purchased a new car with the insurance proceeds. Jennifer decided that since
she had insurance, it really did not matter if she took proper care of her new
car because she could always get a new one. Jennifer got in the habit of
leaving her new car unlocked and it was stolen. After Jennifer bought another
car she decided that she really liked the insurance adjuster and wanted to see
him again, so one day she purposefully set her car on fire. In her
carelessness, she also caught her hand on fire. Jennifer was depressed over her
circumstances and decided she didn’t want to go back to work. She filed a
falsified disability claim for the loss of use of her hand (even though she
could still use her hand). Which of the following statements is true?
Which of the following is most likely to be
an insurable risk?
Erin purchased a life insurance policy on
her own life. Her husband Mike is the beneficiary of the policy. Which of the
following is not a necessary legal element of the contract?
Joe wants to purchase a life insurance
policy on his own life. He is interested in learning about the various
approaches to determine that amount needed. Which of the following is not true
regarding the three most common approaches?
Which of the following is true regarding
the financial needs method used to determine life insurance needs?
Josh, age 30, is a single father of one
daughter, Nicole, age 11. Josh works for an advertising agency with an annual
income of $40,000. Due to his messy divorce and several student loans that
drain his financial resources, Josh lives paycheck to paycheck. His doctor
recently discovered that he has high cholesterol and Josh is worried that his
health may fail. He wants to purchase a life insurance policy to protect Nicole
in the event of his untimely death (his employer does not yet offer a group
plan). Assuming he wants to buy as much coverage as possible for the cheapest price,
which of the following policies should he buy?
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