A loss exposure is defined as:
(A) a loss that might occur
(B) an undesirable end result of a risk
(C) the largest possible loss
(D) the probability
... [Show More] of a loss
The answer is (A) by definition
Which of the following statements concerning the beneficiary provisions in a life insurance policy is correct?
(A) Only one person may be named as a primary beneficiary, but several may be named as contingent beneficiaries.
(B) The primary beneficiary's share of policy proceeds is generally reduced if the contingent beneficiary outlives the insured.
(C) The estate of the insured is commonly named as beneficiary to avoid transfer taxes.
(D) The contingent beneficiary will receive policy proceeds only if the primary beneficiary predeceases the insured.
The answer is(D).
(A) is incorrect because one or more people or entities may be named as either primary or contingent beneficiaries.
(B) is incorrect because the contingent beneficiary receives nothing and all proceeds go the primary beneficiary when the insured dies unless the primary beneficiary predeceases the insured or loses entitlement to the benefits for some other reason.
(C) is incorrect because transfer taxes may be incurred when the estate is the beneficiary.
Which of the following types of insurance is often sold by mortgage lenders to provide the funds necessary to pay off a 10-year mortgage loan if the insured dies?
(A) decreasing term
(B) increasing term
(C) modified whole life
(D) 10-year renewable term
The answer is (A).
(B) is incorrect because the amount of insurance under an increasing term policy increases while the amount needed to pay off the mortgage decreases.
(C) is incorrect because the amount of insurance under a modified whole life policy remains constant while the amount needed to pay off the mortgage decreases.
(D) is incorrect because the amount of insurance under a 10-year renewable term policy remains constant for 10 years while the amount needed to pay off the mortgage decreases.
Which of the following is most likely to be a condition that will result in the payment of unemployment compensation benefits?
(A) unemployment because of a labor dispute
(B) unemployment as a result of voluntarily leaving a job without good cause
(C) unemployment resulting from discharge that was prompted by misconduct
(D) unemployment that results from adverse economic conditions
The answer is (D).
(A), (B), and (C) are incorrect because common reasons for disqualification under unemployment compensation programs include involvement in a labor dispute, voluntarily leaving a job without good cause, and discharge for misconduct. [Show Less]