21. Long-term financial goals often depend on borrowing funds. The type of loan
ID: 2625110 • Letter: 2
Question
21. Long-term financial goals often depend on borrowing funds. The type of loan that does not fulfill the long-term goal achievement is ____ loans.
a.
consumer
b.
installment
c.
automobile
d.
mortgage
e.
single payment
22. A characteristic of consumer loans is that they
a.
include a negotiated contract.
b.
are arrived at through a formal process.
c.
include a repayment schedule.
d.
are used to purchase big-ticket durable goods and other items.
e.
are all of these.
23. A consumer loan probably would not be used to
a.
purchase an auto.
b.
pay for college tuition.
c.
consolidate several loans into one.
d.
finance a special vacation.
e.
buy back-to-school clothes.
24. The most popular use of consumer loans is to
a.
purchase a car.
b.
finance a college education.
c.
finance a vacation.
d.
buy a house.
e.
buy furniture.
25. A personal consumer loan could be used to
a.
consolidate several loans into one.
b.
purchase a car.
c.
cover a temporary cash shortfall.
d.
buy a mobile home.
e.
do all these things.
26. The basic purpose of insurance is to
a.
protect your health.
b.
protect you from losses.
c.
supplement your income.
d.
shield you from bad decisions.
e.
none of these
27. Insurance is a tool that can lessen ____ risk.
a.
social
b.
mental
c.
economic
d.
accident
e.
exposure
28. The purchase of insurance is a common form of which risk management technique:
a.
risk retention
b.
risk transfer
c.
risk assumption
d.
risk avoidance
e.
loss control
29. Underwriting is best described as:
a.
Activities related to selecting acceptable risks so that general insurer objectives are met.
b.
Actuarial science
c.
Production-related activities performed primarily by agents in the field
d.
Process of developing pricing structures for insurance, often performed by an actuary
e.
A function most often performed by adjusters.
30. From the standpoint of the person buying insurance, the central purpose of insurance should be:
a.
to collect for all accidental losses
b.
to transfer risks of serious losses
c.
to support the prevention of losses
d.
to accumulate savings
e.
to reduce payments for the most frequently occurring losses
31. The fastest growing segment of the health care industry is
a.
fee for service plans.
b.
Medicaid.
c.
managed care plans.
d.
All of these are growing at the same rate.
e.
none of these.
32. Jackie pays $20 every time she visits her doctor. She is covered by a(n)
a.
HMO
b.
IPA
c.
PPO
d.
Indemnity plan
e.
Could be any of these except the indemnity plan.
33. Which of the following types of plans pay for some medical costs even when the insured decides to go out of the provider network (without a referral) for services?
a.
HMO
b.
IPA
c.
PPO
d.
POS
e.
c and d
34. An Individual Practice Association differs from a HMO in that
a.
you have no choice of the physician.
b.
they are located in a central facility.
c.
associated doctors operate from their own offices.
d.
they are less likely to be found in small communities.
e.
none of these.
35. The "O" in COBRA stands for which of the following words?
a.
optical
b.
opportunity
c.
ordinary
d.
omnibus
e.
occupational
36. All property insurance companies require you to show the following when making a claim:
a.
Proof of loss
b.
Personal property inventory
c.
Values at the time of inventory
d.
All of the above.
37. The basic principles of property and liability insurance pertain to:
a.
types of exposure
b.
the principles of indemnity
c.
coinsurance
d.
all of the above
38. Some common liability risks include:
a.
driving a car
b.
entertaining guests at home
c.
being careless in performing professional duties
d.
all of the above
39. The asset most likely to be specifically itemized in a property insurance endorsement is
a.
sofa.
b.
clothing.
c.
jewelry.
d.
garden equipment.
e.
all of these.
40. Your standard HO policy will not include coverage for damage done by
a.
flood.
b.
windstorm.
c.
falling objects.
d.
wind.
e.
theft.
a.
consumer
b.
installment
c.
automobile
d.
mortgage
e.
single payment
Explanation / Answer
21)e.single payment
22)e.are all of these
23) e.buy back-to-school clothes.
24) a. purchase a car
25)e.do all these things
26)b.protect you from losses
27)c.economic
28)b.risk transfer
29)d.Process of developing pricing structures for insurance, often performed by an actuary
30)b.to transfer risks of serious losses
31)b.Medicaid.
32)e.Could be any of these except the indemnity plan.
33)e.c and d
34)a.you have no choice of the physician
35)d.omnibus
36)d.All of the above.
37)d.all of the above
38)d.all of the above
39)c.jewelry
40)a.flood
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