Financial Liability Law Quiz Questions

21 Questions | Total Attempts: 80

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Financial Liability Law Quiz Questions

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Questions and Answers
  • 1. 
    The most accurate method of determining life insurance needs is
    • A. 

      The budget method.

    • B. 

      The income method

  • 2. 
    If you buy a term insurance policy with a conversion option, this means that you
    • A. 

      Can convert your term policy to a whole life policy during the conversion period.

    • B. 

      Can convert the policy to a larger term policy after one year.

  • 3. 
    Before you start to invest, you should ensure liquidity by owning___________.
    • A. 

      Money market mutual funds.

    • B. 

      Options and puts.

  • 4. 
    Corporate bonds
    • A. 

      Offer a predictable return to investors in the form of interest or coupon payments

    • B. 

      Maintain their value even in periods of changing interest rates

  • 5. 
    The factor that will not reduce your insurance rate is
    • A. 

      Increasing your deductible.

    • B. 

      Paying all speeding tickets promptly.

  • 6. 
    Which of the following would pay for medical care for people who were injured in your automobile as a result of an accident that was your fault?
    • A. 

      Medical payments

    • B. 

      Bodily injury liability

  • 7. 
    If a person is diabetic and is applying for a new health care insurance policy, s/he might be most concerned with which of the following?
    • A. 

      Preexisting conditions

    • B. 

      Cancellation options

  • 8. 
    Auto insurance can be very expensive if you
    • A. 

      Are a male under 25.

    • B. 

      Have a new car.

  • 9. 
    __________ coverage covers damage to your car as a result of theft, fire, vandalism or other non-accident events.
    • A. 

      Comprehensive

    • B. 

      Umbrella

    • C. 

      Universal

  • 10. 
    Which of the following is not true about the state financial liability laws?
    • A. 

      They are the same for all states

    • B. 

      They may require proof of insurance when drivers are involved in an accident

  • 11. 
    The amount of damage that you will be required to cover if your car is involved in an accident that is your fault is your
    • A. 

      Deductible.

    • B. 

      Premium.

  • 12. 
    The comprehensive or collision premium of a Rolls-Royce in relationship to a Chevy
    • A. 

      Will be higher because a Rolls-Royce costs more than a Chevy.

    • B. 

      Is a poor investment.

  • 13. 
    Before you start to invest, you should ensure liquidity by owning___________.
    • A. 

      Money market mutual funds

    • B. 

      Corporate bonds.

    • C. 

      Options and puts.

  • 14. 
    One of the most commonly used measures of inflation is the _________.
    • A. 

      Consumer price index

    • B. 

      Gross domestic product

  • 15. 
    A(n) ___________ policy insures your possessions within a house or condominium that you do not own.
    • A. 

      Renters insurance

    • B. 

      Leasing insurance

  • 16. 
    __________ covers damage to your car when you are at fault in an accident.
    • A. 

      Collision

    • B. 

      Liability

  • 17. 
    Indemnity health care plans have
    • A. 

      More flexibility and choices than managed care plans.

    • B. 

      Fewer health care professionals to choose from compared to HMOs.

  • 18. 
    Which of the following is considered personal property for home insurance coverage?
    • A. 

      Furniture

    • B. 

      Tree

    • C. 

      Swing

  • 19. 
    Which of the following is usually not offered as part of a benefits package to employees? Answer
    • A. 

      Auto insurance

    • B. 

      Retirement benefits

  • 20. 
    Which of the following will you always have with common stock?
    • A. 

      Voting rights

    • B. 

      Dividends

    • C. 

      Capital appreciation

  • 21. 
    _________ coverage covers damage to your car as a result of theft, fire, vandalism or other non-accident events.
    • A. 

      Comprehensive

    • B. 

      Umbrella

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