Question

60. Which of the following is not a feature of the Terrorism Risk Insurance Act of 2002? (a) Losses that exceed $100 billion are not covered. (b) The law does not apply to acts of international terrorism when losses are less than $5 million. (c) Government pays 50 percent of losses in excess of $100 billion. (d) Government pays 90 percent of the losses. 61. Insurance companies' attempts to minimize adverse selection and moral hazard explain which of the following insurance practices? (a) Gender-neutral premiums (b) Flat-rate premiums (c) Restrictive provisions (d) All of the above (e) Only (a) and (b) of the above 62. If automobile insurance companies were prevented from charging risk-based premiums, but could selectively screen potential policyholders, the likely effect would be to (a) increase the number of young men obtaining insurance coverage relative to young women. (b) decrease the number of young women obtaining insurance coverage relative to young men. (c) decrease the number of young men obtaining insurance coverage relative to young women. (d) both (a) and (b) of the above 63. Clauses in life insurance policies that eliminate death benefits if the insured person commits suicide are an example of a (a) restrictive provision. (b) restrictive covenant. (c) anti-fraud exclusion. (d) risk-based deductible. 64. Which of the following do not help people during their retirement? (a) Term life insurance (b) Annuity (c) Whole life insurance (d) Universal life insurance

Answer 1

60) Option C - Government pays 90% of the losses and the other 10% is paid by the insurer.

61) Option D - all of the above

62) Option D - both a and b

63) Option A - Its a form of restrictive provision

64) Option A - Term life insurance does not provide any retirement benefits, its only beneficial to the family members remaining in the event of death of the insured.