FREE RIBO Insurance Fundamentals Test 2

Question 1

You accidentally strike the guardrail as you attempt to avoid hitting a squirrel.

Accepted Answer

Automobile

Answer

Life

Answer

Health

Answer

None of the above

Question 2

The deductible is the part of the insurance coverage that the insured will pay.  It is usually set to determine the monthly premium amount.

Accepted Answer

TRUE

Answer

FALSE

Question 3

You hit and injure a pedestrian in a crosswalk.

Accepted Answer

Automobile

Answer

Health

Answer

Life Insurance

Answer

Disability

Question 4

Automobile Insurance is an arrangement between an individual (consumer) and insurer (insurance company) to protect the individual against risk from automobile accidents.

Accepted Answer

TRUE

Answer

FALSE

Question 5

You need a cast after breaking an ankle while roller-blading.

Accepted Answer

Health Insurance

Answer

Disability Insurance

Answer

Life Insurance

Answer

Automobile Insurance

Question 6

Your apartment is broken into and your computer is stolen. You will need to purchase homeowners insurance.

Accepted Answer

FALSE

Answer

TRUE

Question 7

You are injured in an automobile accident and are at home unable to work for 4 months.

Accepted Answer

Disability Insurance

Answer

Life Insurance

Answer

Health Insurance

Answer

Automobile Insurance

Question 8

You are advising a client about retirement planning.  The client is 38 years old and wants to purchase a retirement annuity to supplement future Social Security benefits and a company pension plan. The client does not currently have any significant savings, but insists that he will be able to set something aside each year for annuity payments. Which of the following plan structures would be most appropriate for this client?

Accepted Answer

Periodic payment deferred annuity

Answer

Periodic payment immediate results

Answer

Single payment deferred annuity

Answer

Single payment immediate annuity

Question 9

Mary knows that her husband Larry is of sound physical health and is expected to have a long life, but Larry has trouble remembering things, has a terrible track record when it comes to managing money, and cannot be relied upon to make sound financial decisions. Which of the following life insurance settlement options should Mary elect under her won policy to guarantee Larry will have lifetime income if she dies first?

Accepted Answer

Life income option

Answer

Fixed amount installments

Answer

Fixed period installments

Answer

Lump sum settlement

Question 10

When Donna applied for life insurance and paid the initial premium on August 14, her agent issued a conditional receipt. Donna was killed in an automobile accident on August 22, before the policy was issued. The insurance company found nothing negative in her application and has no reason to reject the risk or classify it other than as standard. In this case, the insurance company will:

Accepted Answer

Issue the policy anyway and pay the face value to Donna's beneficiary

Answer

Return the premium to Donna's estate ,since it has not obligation to pay the death claim

Answer

Keep the premium and reject the risk on the basis that the applicant died before the policy could be issued

Answer

Negotiate a reduced settlement with Donna's beneficiary due to the unusual circumstances involved