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Exam 20: Life, Fire and Auto Insurance

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Question 1

Multiple Choice

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Maryville University purchased building insurance for a temporary bookstore for a total annual charge of $1,600. It closed the facility after five months. What is the refund?

A) $768
B) $976
C) $624
D) $832
E) None of these

F) A) and B)
G) C) and E)

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Question 2

True/False

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Premiums for straight-life insurance are higher than premiums for term insurance.

A) True
B) False

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Question 3

Multiple Choice

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Which one of the following builds up no cash value?

Term insurance would pay the face amount of the policy in case of the death of the insured.

Lowering deductibles for collision will result in increased premiums.

Melissa Toby, age 36, bought a straight-life insurance policy for $80,000. Calculate her annual premium. If after 20 years she no longer pays premiums, what nonforfeiture options are available to her?

Collision and comprehensive:

Jay Miller insured his pizza shop for $200,000 for fire insurance at an annual rate per $100 of $.49. At the end of 10 months, Jay canceled the policy since his pizza shop went out of business. Using the table in the handbook, the refund to Jay is:

Given the following information and using the tables in the handbook, the total annual premium is: Sam Montgomery: territory 5 Classified driver 17 Car age 4 Symbol 5 State has compulsory insurance and the following options:

As a result of coinsurance, the insurance company might pay more than face value.

A 20-year endowment does not build up any cash value by the end of year 5.

The short rate cancellation table is used if the insured cancels the policy.

Compulsory liability insurance includes bodily injury and property damage.

Al Smith, who lives in territory 5, carries 10/20/5 compulsory liability insurance along with optional collision that has a $300 deductible. Al, who was at fault in an accident, caused $4,000 damage to the other auto as well as $900 damage to his own car. Also, the courts awarded $15,000 and $7,000, respectively, to the two passengers in the other car for personal injuries. Al is responsible to pay a total of:

Calculate the optional bodily injury cost for the following: Class 10; optional bodily Injury: 100/300/50

A premium for fire insurance could be lower than someone else's if:

Term insurance:

Lee's toy store is worth $400,000 and is insured for $300,000. Assuming an 80% coinsurance clause and a fire that caused $190,000 of damage, the liability of the insurance company is:

The property of Vin's Garage is worth $400,000. Vin has a fire insurance policy of $160,000 that contains an 80% coinsurance clause. What will the insurance company pay on a fire that causes $180,000 of damage? If Vin met the coinsurance, how much would the insurance company pay?

Universal life provides whole life protection.