Answer Sheet 4

Question 1

Insurance is a contract on which one person, for a fee, agrees to guarantee another against a specific loss.

Answer 1

TRUE

Question 2

Term life insurance premiums are paid only for a certain length of time, or “term’ but the coverage lasts for the insured’s entire life.

Answer 2

FALSE

Question 3

Disability insurance is important because the average person is seven times more likely to be disabled for at least 90 days than to die before age 65.

Answer 3

TRUE

Question 4

An insurance policy must meet all the common law requirements for a contract

Answer 4

TRUE

Question 5

Primary methods of alternative dispute resolution include litigation and mediation.

Answer 5

FALSE

Question 6

Generally, mandatory arbitration provisions in a contract are valid

Answer 6

TRUE

Question 7

Summary judgment is appropriate when there are no essential facts in dispute

Answer 7

TRUE

Question 8

Advantages of Alternative Dispute Resolution (ADR) include:
(a) ADR is faster than litigation.
(b) ADR keeps the parties talking rather than fighting.
(c) ADR is less expensive than litigation.
(d) All of the above are advantages of ADR

Answer 8

(d) All of the above are advantages of ADR

Question 9

The ADR that uses a neutral person to get parties to reach a voluntary settlement.
(a) arbitration.
(b) negotiation.
(c) mediation.
(d) litigation.

Answer 9

(c) mediation.

Question 10

Jurisdiction is:
(a) the study of law.
(b) the authority of a court to decide a particular type of case.
(c) a federal court concept.
(d) applicable only to appeals courts.

Answer 10

(b) the authority of a court to decide a particular type of case.

Question 11

Federal jurisdiction based upon a “federal question” includes cases based on:
(a) the United States Constitution.
(b) a federal statute.
(c) a federal treaty.
(d) All of the above.

Answer 11

(d) All of the above.

Question 12

. An insurance policy must meet which of the following?
(a) State statutory requirements for tort law.
(b) Federal statutory requirements for tort law.
(c) Common law requirements for contracts.
(d) Common law requirements for tort law

Answer 12

(c) Common law requirements for contracts.

Question 13

Under which of the following does the insured have a right to borrow against his policy.
(a) Term life policy.
(b) Whole life policy.
(c) Disability Insurance
(d) Annuity contract.

Answer 13

(b) Whole life policy.

Question 14

A policy that makes payments to the owner monthly for her entire life is called:
(a) whole life insurance
(b) universal life insurance
(c) an annuity
(d) disability insurance

Answer 14

(c) an annuity

Question 15

Health insurance plans that specify that the patient can be treated only by doctors in the organization
are called:
(a) Health Maintenance Organizations
(b) Health Management Options
(c) Pay for Service Plans
(d) Point Source Plans

Answer 15

(a) Health Maintenance Organizations

Question 16

What is Umbrella Insurance?

Answer 16

The purpose of Umbrella liability insurance protects you when accidents happen and your existing liability insurance policies cannot cover all the expenses. Essentially, it picks up where your business auto liability, general liability or other liability coverage stops, providing extra protection against bodily injury and/or property damage.

Question 17

What right does the insurer have if it is found that the insured has misrepresented important facts?

Answer 17

Insurers have the right to void a policy if, during the application process, the insured makes a material misstatement or conceals a material fact.

Question 18

What is an insurable interest and why is it important?

Answer 18

An insurance contract is not valid unless the owner has an insurable interest in the subject matter of the policy.

Question 19

What are the courts included in the State Court System?

Answer 19

Trial Courts
Appellate Courts
State Supreme Court

Question 20

Name and briefly describe three (3) bargaining styles?

Answer 20

Avoider: Avoiders are individuals who strongly dislike interpersonal conflict and tries to dodge any situation that could lead to open disagreement. This person prefers peace and quiet in both
their personal and professional lives.

Compromiser: Compromisers favor agreements that give each party some equitable part of each and every item under discussion. Compromisers are fair-minded people who are interested in maintaining productive relations with others

Accommodator: Accommodators like to resolve interpersonal conflict by solving the other person’s problems.

Competitor: The Competitor likes to win. They are willing to take chances to get what they
want even if they have to lie, cheat, or manipulate others.

Problem Solver: The problem solver seeks to discover the underlying problem through candid disclosure of interest, find the best solution by brainstorming many options and resolve tough
issues