Exam 3 - Principles of Insurance review pt.2

Which of the following statements about unemployment insurance benefits is true?

A) Benefits are a flat amount regardless of a worker's previous wages.
B) Because of federal legislation, the maximum benefit is the same in all states.
C) Most states pay regular benefits for a maximum duration of 26 weeks.
D) Under the extended benefits program, the federal government continues benefit payments for up to 3 years for workers who have exhausted their regular benefits.

C) Most states pay regular benefits for a maximum duration of 26 weeks.

Which of the following statements about the coverage of health care services under Part A of Medicare is (are) true?
I. Services in the patient's home are covered if the patient requires skilled care and meets certain conditions.
II. Hospice care is available for beneficiaries with a terminal illness.

A) I only
B) II only
C) both I and II
D) neither I nor II

C) both I and II

Which of the following statements about disability benefits under Social Security is true?

A) There is a one-year waiting period before benefits are payable.
B) Benefits are payable as long as the disabled worker is unable to perform his or her regular occupation.
C) Benefits are payable only if the condition causing the disability is expected to result in death prior to age 65.
D) In addition to the disabled worker receiving the benefits, benefits can also be paid to eligible dependents.

C) Benefits are payable only if the condition causing the disability is expected to result in death prior to age 65.

Frank is doing some life insurance planning. A financial advisor said, "be sure to consider Social Security when examining sources of funds available for family support if you die." The financial advisor was referring to which Social Security benefit?

A) retirement benefits
B) survivor benefits
C) disability benefits
D) health insurance benefits

B) survivor benefits

EFG Company experienced a reduced demand for its products during a recession. EFG managers were considering laying off some workers when the personnel director said, "Let's not lay off these workers. If we do, our unemployment insurance premiums will increase. The state considers employment stability when determining our premium." Considering the firm's employment record when determining the rate to charge for unemployment insurance is called

A) experience rating.
B) class rating.
C) schedule rating.
D) retrospective rating.

A) experience rating.

Under one type of Medicare Advantage Plan, members of the plan can see any doctor or health services provider that accepts Medicare patients. If members receive care outside the network of member physicians and care facilities, they must pay higher out-of-pocket costs. This type of Medicare Advantage Plan is a
A) Medicare HMO.
B) Medicare PPO.
C) Medicare Special Needs Plan.
D) Medicare Private Fee-for-Service Plan.

B) Medicare PPO.

All of the following are insured persons under the liability coverage of the PAP EXCEPT

A) a friend to whom the named insured loans a covered auto.
B) the employer of the named insured for actions resulting from the named insured's use of a covered auto.
C) the former spouse of the named insured who moved out of the home 2 years ago when the divorce was finalized.
D) a relative of the named insured if a member of the same household.

C) the former spouse of the named insured who moved out of the home 2 years ago when the divorce was finalized.

Which of the following situations would be covered under the liability section of the PAP? I. A mechanic is sued by a pedestrian who is injured when the mechanic has an accident while road testing the insured's auto. II. The daughter of the named insured is sued after she has an accident when a new friend she just met at a campus hangout lets her drive his car.

A) I only
B) II only
C) both I and II
D) neither I nor II

B) II only

Larry has $25,000 of bodily injury liability coverage under his PAP. This limit is the minimum amount required by his state to be considered financially responsible. While on a vacation, Larry visited a neighboring state which has a minimum financial responsibility limit of $50,000 for bodily injury. Which of the following statements describes the situation for Larry while he was in the neighboring state?

A) Larry's policy was suspended while he was in the neighboring state.
B) Larry had only $25,000 of liability coverage.
C) Larry's policy automatically provided $50,000 of liability coverage.
D) Larry's policy automatically provided $100,000 of liability coverage.

C) Larry's policy automatically provided $50,000 of liability coverage.

John occasionally borrows the car of his friend, Sophie. Sophie has a PAP with liability limits of 100/300/50. John also has a PAP, and his liability limits 250/500/50. John had an accident while using Sophie's car and was found to be legally liable for $300,000 in bodily injury liability for injuries suffered by one person. How much will be paid by each policy?

A) Sophie's policy will pay $150,000, John's policy will pay $150,000.
B) Sophie's policy will pay $50,000, John's policy will pay $250,000.
C) Sophie's policy will pay $100,000, John's policy will pay $200,000.
D) John's policy will pay the entire amount.

C) Sophie's policy will pay $100,000, John's policy will pay $200,000.

Tony has an unendorsed Personal Auto Policy which provides medical payments coverage. Under which of the following circumstances would the injured person be eligible for benefits under Tony's policy?
I. A friend in the car is injured while Tony is driving a covered auto.
II. A passenger on a motorcycle driven by Tony is injured when Tony hit another vehicle.

A) I only
B) II only
C) both I and II
D) neither I nor II

A) I only

Which of the following persons is (are) insured under the uninsured motorists coverage of the PAP?
I. A pedestrian struck by a covered auto if he or she has no insurance to pay medical expenses II. The spouse of a named insured who is killed by an uninsured motorist
A) I only
B) II only
C) both I and II
D) neither I nor II

B) II only

All of the following are considered to be uninsured vehicles for purposes of the uninsured motorists coverage of the PAP EXCEPT

A) a vehicle owned by an individual who is insured, but for less than the amount required by the state's financial responsibility law.
B) a hit-and-run vehicle, the ownership of which cannot be determined.
C) a vehicle owned by an individual who purchased just enough liability insurance to satisfy the state's financial responsibility law.
D) a vehicle insured by a company which becomes insolvent before a claim can be paid.

C) a vehicle owned by an individual who purchased just enough liability insurance to satisfy the state's financial responsibility law.

Joyce was injured by an uninsured drunk driver while she was riding in a friend's car. Joyce and her friend each have a PAP with an uninsured motorists limit of $50,000. How much will be paid by each policy if it is determined that Joyce has $70,000 of bodily injuries?

A) Each policy will pay $35,000.
B) Joyce's policy will pay $50,000, and the friend's policy will pay nothing.
C) Joyce's policy will pay $50,000, and the friend's policy will pay $20,000.
D) The friend's policy will pay $50,000, and Joyce's policy will pay $20,000.

D) The friend's policy will pay $50,000, and Joyce's policy will pay $20,000.