Multiple Choice Answers

Which of the following would be covered by a home insurance policy?
A. Hospital expenses for surgery
B. Damage to another person’s car when driving
C. Accidental injury to a coworker on the job
D. Wind damage to your roof

Defective house wiring is an example of a:
A. hazard.
B. peril.
C. risk.
D. speculation.
An umbrella policy is designed to cover:
A. expensive personal property.
B. additional buildings on your property.
C. property when traveling away from home.
D. major personal liability suits.

Renter’s insurance would include coverage for:
A. flood damage.
B. personal property.
C. building and other structures.
D. earthquake damage.

Which statement is correct regarding stock life insurance companies?
A. A stock company sells participating policies.
B. A stock company always charges higher premiums than mutual companies.
C. A policyholder participates in the profit or loss of the company.
D. A stock company generally sells nonparticipating (non par) policies.

Larry Foster has bought a car with front and side airbags and antilock brakes. How is Larry managing his risk?
A. Risk Avoidance
B. Risk Reduction
C. Risk Assumption
D. Risk Shifting

Which of the following types of coverage would pay for damage to your automobile in an accident for which you were at fault?
A. Property damage liability
B. Collision
C. Comprehensive physical damage
D. No-fault insurance

Henry Edwards was injured in an accident caused by another driver who did not have insurance. Henry’s medical expenses would be covered by:
A. no-fault coverage.
B. collision.
C. bodily injury liability.
D. uninsured motorists protection.

Joe Johnson needs surgery for  appendicitis. Which part of his basic insurance coverage should help pay for this surgery?
A. Hospital Expense Insurance
B. Surgical Expense Insurance
C. Physician Expense Insurance
D. Major Medical Expense Insurance
Nathanial Drummond has three different insurance policies. He has been injured in an accident and has incurred $30,000 in medical bills. There is a clause in all of his insurance contracts the makes sure that he receives no more than $30,000 in payments from his insurance companies. This clause is called:
A. coordination of benefits.
B. deductible.
C. coinsurance.
D. major medical expense insurance.

Sophie Bennett has met the deductible for her doctor’s visits. However, her insurance company requires her to pay 20% of all expenses above this deductible amount. This clause is called:
A. coordination of benefits.
B. add on expenses.
C. coinsurance.
D. major medical expense insurance.

Karen Blumenthall was seriously injured in a car accident and is paralyzed from the waist down. Luckily she has an insurance policy that will pay for someone to come in and help with her day to day activities such as bathing, dressing and household chores. What type of insurance policy is this likely to be?
A. Comprehensive Major Medical Insurance
B. Hospital Indemnity Policy
C. Long Term Care Insurance
D. Cancer Insurance Policy

Darren Chase has an insurance policy that tells him he can only stay in the hospital for 60 days during the year. What provision in his insurance policy would specify this?
A. Eligibility
B. Assigned Benefits
C. Benefit Limits
D. Exclusions and Limitations

With disability income insurance, benefits usually begin:
A. on the first day of disability.
B. between 30 and 90 days after the disability occurs.
C. on the 10th day of disability.
D. one year after the start of the disability.

If you wish to pay exactly the same life insurance premium each year, you would choose a:
A. nonparticipating policy.
B. participating policy.
C. term insurance policy.
D. variable life policy.

Which type of insurance is sometimes called temporary insurance?
A. Whole life insurance
B. Term insurance
C. Ordinary life
D. Modified life

Francesca Brown has a life insurance policy that provides her with protection for the next 10 years. However, she can get five more years of protection at the end of this term without having to have a medical examination until she reaches the age of 70. Her premiums will rise during each five year period. What type of life insurance does Francesca likely have?
A. Term insurance
B. Renewable term insurance
C. Convertible term insurance
D. Decreasing term insurance

Joan Stone owns a home in Edmond, Oklahoma. She is worried her property might be damaged due to some unforeseen event. This worry about a loss is an example of:
A. a peril.
B. a hazard.
C. a risk.
D. a premium.