QUESTION 1

1. . Which of the following risk management techniques is the purchase of insurance a common form of?

a.Loss control

b.Risk transfer

c.Risk avoidance

d.Risk retention

e.Risk assumption

QUESTION 2

1. Which of the following programs is a public assistance program that provides health insurance benefits only to those who are unable to pay for healthcare?

a.Medicare

b.Social Security disability benefits

c.Worker's compensation

d.Blue Cross/Blue Shield

e.Medicaid

QUESTION 3

1. Disability income benefits under social security are automatically adjusted periodically for cost of living increases.

True

False

QUESTION 4

1. A participating policy:

a.increases the face amount of the policy.

b.may pay dividends.

c.contains no tax benefits.

d.is a form of endowment insurance.

e.requires a savings function.

QUESTION 5

1. Health insurance coverage can include:

a.group plans.

b.workers' compensation.

c.social security.

d.veteran's benefits.

e.all of the above

3.33 points

QUESTION 6

1. A universal life insurance policy generally does not provide for a tax-sheltered savings platform.
2. True
3. False

3.33 points

QUESTION 7

1. Diversification of investments increases risk.
2. True
3. False

3.33 points

QUESTION 8

1. An essential ingredient of an effective investment strategy is:
2. a.a good broker.b.a bull market.c.enough money to diversify.d.blue-chip stock selections.e.high-income securities.

3.33 points

QUESTION 9

1. Disability income benefits under social security will be paid as long as you cannot perform the duties of the job you were holding when the disability began.
2. True
3. False

3.33 points

QUESTION 10

1. Which of the following isnota desirable feature in a long-term care policy?
2. a.Inflation protectionb.Coverage for preexisting conditionsc.Coverage for Alzheimer's diseased.Duration of benefits of 6 yearse.Optional renewability clause

3.33 points

QUESTION 11

1. Henry must make set premium payments on his insurance policy until he dies, and if he cancels the policy he will receive the cash value. His plan is a _____ policy.
2. a.term lifeb.whole lifec.limited payment lifed.universal lifee.none of the above

3.33 points

QUESTION 12

1. From the standpoint of the person buying insurance, the central purpose of insurance should be:
2. a.to make profit out of uncertain future events.b.to transfer risks of serious losses.c.to accumulate savings.d.to collect for all accidental losses.e.to reduce payments for the most frequently occurring losses.

3.33 points

QUESTION 13

1. An insured usually chooses variable life insurance in order to:
2. a.provide more flexible coverage.b.emphasize the savings portion while still having death protection.c.substitute for fixed-dollar insurance protection.d.lessen the savings feature of life insurance.e.reduce insurance premiums.

3.33 points

QUESTION 14

1. Which of the following changes would tend to increase the premium on a disability policy?
2. a.A shorter elimination periodb.Use of "any occupation" definition of disability instead of "own occupation to which one is reasonably suited"c.Decreasing the benefit level to 50% from 66% of prior earningsd.Decreasing the payment period from until age 65 to a maximum of 2 yearse.None of the above would tend to increase the premium

QUESTION 15

1. Disability income insurance will provide income to a disabled or ill person:
2. a.without a waiting period.
3. b.with unlimited funds for years.c.with a waiting period before income is received.d.with payments made to the recipient for up to age 70.e.none of the above

QUESTION 16

1. HMOs require members to pick one primary care physician.
2. True
3. False

3.33 points

QUESTION 17

1. The probability of a loss occurring can be reduced by:
2. a.loss prevention.b.risk observance.c.risk assumption.d.risk retention.e.insurance.

3.33 points

QUESTION 18

1. A limit order may be used either to buy or to sell.
2. True
3. False

3.33 points

QUESTION 19

1. A bull market is characterized by:
2. a.investor optimism.b.investor pessimism.c.economic slowdown.d.falling stock prices.e.governmental stimulus.

3.33 points

QUESTION 20

1. The primary purpose of life insurance is to provide:
2. a.financial security for dependents in the event of death.b.protection from creditors and lawsuits.c.tax-advantaged investments.d.high-yield investments.e.all of the above

3.33 points

QUESTION 21

1. During a bull market:
2. a.investors are pessimistic.b.prices go up.c.economy slows down.d.prices remain stable.e.prices go down.

3.33 points

QUESTION 22

1. A grace period permits the policy holder to retain insurance even though the premium has not been paid for:
2. a.3 months.b.31 days.c.6 months.d.12 months.e.50 days.

3.33 points

QUESTION 23

1. A stock portfolio containing 80% common stocks is most likely to be appropriate for:
2. a.a retired couple who needs a high return.b.a young single worker putting money aside for retirement.c.a portfolio with 80% in common stocks is not suitable for anyone under any circumstances.d.a divorced middle-aged mother who needs a high return.e.a blue-collar, two-income family with five kids.

3.33 points

QUESTION 24

1. Disability income insurance provides benefits that are designed to:
2. a.substitute for social security disability benefits.b.substitute for lost income.c.cover hospital care costs from illness.d.pay for hospital care costs from injuries.e.supplement retirement income for the elderly.

3.33 points

QUESTION 25

1. Eating healthy and exercising is an acceptable substitute for comprehensive health care coverage.
2. True
3. False

3.33 points

QUESTION 26

1. A life insurance contract contains clauses for:
2. a.settlement options.b.policy reinstatement.c.beneficiary clause.d.all of the abovee.none of the above

3.33 points

QUESTION 27

1. The three major categories of life insurance are term, straight life, and limited payment.
2. True
3. False

3.33 points

QUESTION 28

1. Group life insurance is:
2. a.a term policy designed to pay off the mortgage balance in the event of the borrower's death.b.an insurance that is sold in conjunction with the sale of a group of assets.c.an insurance in which benefits are a function of the returns being generated on the investments selected by the policyholder.d.an insurance that provides a master policy for a group.e.all of the above

3.33 points

QUESTION 29

1. A diversified securities portfolio is characterized by:
2. a.minimal loss potential.b.concentrating on a single industry.c.formula timing.d.stable earnings.e.dissimilar risk and return characteristics of the securities.

3.33 points

QUESTION 30

1. Health Maintenance Organizations (HMOs) provide prepaid health care to participants.
2. True
3. False