08187800 Managing Insurance Needs - 63271

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08187800 Managing Insurance Needs

1. You have a parent who may need nursing care at some time in the future. You know the health insurance policy doesn’t cover such expenses and that Medicare coverage is limited. You

should consider

A. disability insurance.

B. extended HMO.

C. group senior health care coverage.

D. long-term care insurance.


2. You’re the sole source of income for your family and your job requires you to be in good physical condition. You’re concerned that an injury could prevent you from performing your work. You should consider

A. long-term care insurance.

B. extended HMO.

C. disability income insurance.

D. Medicare.

3. You’re reviewing your homeowner’s insurance policy to identify perils. Which one of the

following might be listed in that section of the policy?

A. Liability exposure C. Indemnity principle

B. Insurable interest D. Fire and smoke


4. You’ve elected to purchase a participating policy and will therefore have the potential to


A. cash value. C. group rates.

B. extended benefits. D. policy dividends.


5. The settlement option chosen by most beneficiaries is

A. lump sum. C. fixed amount.

B. interest only. D. fixed time.


6. The least expensive form of permanent insurance protection is

A. term. C. limited payment.

B. straight life. D. universal.


7. Commonly, surgical expenses are covered on the basis of

A. actual surgical expense.

B. listed benefit schedules.

C. specific percentage of surgical expense.

D. average national cost of the surgery.


8. Even though your insurance company issued you a policy after reviewing your application

for insurance, it can still withdraw the policy for certain reasons if the _______ clause is in

the policy.

A. incontestability C. loss prevention

B. underwriting D. risk assumption


9. The best way to determine if you need life insurance and how much you need is to use the

_______ approach.

A. multiple earnings C. future value

B. needs D. financial security


10. After the insurance company reimbursed you for the loss related to property you insured, it

made a request from the negligent party to recover its payment. It has the right to do this

under the policy because of the right of

A. subrogation. C. indemnity.

B. coinsurance. D. negligent action.

11. To obtain insurance for any property, whether a home, an automobile, or other property,

you must have a(n)

A. broker. C. insurable interest.

B. premium. D. liability.


12. In the United States, the right to continue a health insurance policy is provided by an act

known as




13. Government-sponsored programs can complement private health insurance programs. If

you’re injured on the job, you would be eligible for which government mandated program?

A. Social Security Medicare

B. Workers’ Compensation Insurance

C. Supplementary Medical Insurance

D. Blue Cross/Blue Shield Worker Plan


14. A liability suit could result when

A. lightning strikes your home.

B. your son falls down the stairs of your home.

C. your auto is stolen.

D. a delivery person slips on the steps of your home.


15. Collision protection pays for damage to

A. non-auto property of insured. C. all autos in accident.

B. auto of insured. D. auto of other party in accident.


16. Auto insurance is needed primarily because of

A. potential damage to auto. C. lender’s requirements.

B. potential liability claims. D. state law.


17. Universal life insurance is designed to offer advantages to the policyholder beyond life

insurance “protection.” It also provides

A. very cheap rates and cancellation privileges.

B. short-term coverage and low rates.

C. investment or savings and tax advantages.

D. whole life and low rates.

18. If you want to be able to decide how the savings component of your whole life insurance

policy is invested, you should elect

A. straight life insurance. C. group life insurance.

B. continuous premium coverage. D. variable life insurance.


19. You have a very old car and you know that you need collision insurance and liability

coverage. You don’t want to insure your car for any other damage. Therefore, you wouldn’t

elect to take out _______ coverage.

A. uninsured motorist C. medical payments

B. comprehensive D. bodily injury


20. You have homeowner’s insurance and auto insurance, but due to your high net worth

you’re very worried about liability beyond the amounts covered in those policies. You

should explore

A. an umbrella personal liability policy.

B. an endorsement of loss policy.

C. supplemental liability to the two policies.


D. professional liability coverage.

Solution Description

1. You have a parent who may need nursing care at some time in the future. You know the health insurance policy doesn’t cover such expenses and that Medicare coverage is limited. You

should consider

A. disability insurance.

B. extended HMO.


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