CPCU 553 Test Questions and Answers
3 determinants of life insurance that are decided by the insurer - Answer-1. mortality charges
2. expense charges
3. interest crediting rate
/.a person designated in a life insurance policy to receive a death benefit is referred to as the - Answer-benef...
3 determinants of life insurance that are decided by the insurer - Answer-1. mortality
charges
2. expense charges
3. interest crediting rate
/.a person designated in a life insurance policy to receive a death benefit is referred to
as the - Answer-beneficiary
/.A policyowner of a universal life insurance policy has flexibility with respect to -
Answer-death benefits
/.According to the Council for Disability Awareness, which one of the following is the top
cause of disabilities? - Answer-musculoskeletal disorders.
-obesity is a contributing factor
/.all of the following are included as insureds under the section II - liability coverages of
a homeowners policy except: - Answer-the named insured's separated spouse who
resides and works in another state
/.An example of an uninsured motor vehicle under the PAP is - Answer-a vehicle which
is insured below the state required minimum limit
/.An individual who owns a motorcycle with a sidecar wishes to insure the associate
liability exposure. which one of the following insurance solutions would provide the best
coverage - Answer-misc type vehicle endt to the PAP
/.An individuals liability losses - Answer-may consume most of his/hers present assets
and future income
/.An insured covers his owned auto with more than one PAP each from a different
insurer. In the event of a claim for med pmts coverage who would pay - Answer-each
insurer pays its pro rata share based on the proportion that its limit of liability bears to
the total of applicable limits
/.An insurer's right to recover payment from a legally liable third party is - Answer-
subrogation
/.at which age is tax planning important to consider - Answer-all ages
/.Brad is single and 50 years old. He recently had a promotion at work and has decided
to use some of his salary increase to fund additional retirement income. He participates
, in the 403(b) plan of his employer, but he contributes just enough to get the full
employer matching contribution. He has not made any additional elective deferrals
under the plan, even though he could do so. His adjusted gross income this year is such
that he can only contribute to an IRA on an after-tax basis, and he is ineligible to
establish a Roth IRA. He expects to be in a low income tax bracket after retirement, and
his objective today is to minimize his current taxable income. Which one of the following
would best meet Brad's objective? - Answer-additional elective deferrals under the
403(b) plan
/.Chris and Bill have their family insured under a plan that allows them to select their
own healthcare provider without any restrictions. The plan then reimburses them for a
percentage of their medical expenses after the satisfaction of a deductible. This is an
example of - Answer-an indemnity plan
/.collision coverage under the PAP applies ? - Answer-to damage regardless of fault,
when your car collides with another car or fence
/.Coverage F- med pmts to others in the HO policy applies to BI to a residence
employee when - Answer-the employee is off premises and working, or the employee is
on premises and working or not working
/.Coverages A and B of the unendorsed HO-3 policy insure against direct physical loss
to property described followed by a list of excluded perils. Which one of the following is
true regarding the excluded perils that apply to Coverage A and B?
Select one:
A. Freezing damage to external property is excluded unless reasonable precautions are
taken.
B. Freezing of plumbing and heating systems is excluded at all times unless endorsed.
C. Vandalism damage is excluded if it occurs anytime the property is not occupied.
D. Collapse is excluded as a cause of loss but is covered if it results from other causes.
- Answer-collapse is excluded as a cause of loss but is covered if it results from other
causes
/.Describe the characteristics of a variable universal life insurance policy's subaccounts
- Answer-subaccounts may differ from one another by such factors as asset class and
risk
/.Dirk has a restored 1968 Mustang. Dirk has spent a lot of money and time bringing the
car back to a like-new condition. Dirk insures the Mustang under his Personal Auto
Policy (PAP) with collision and other than collision coverages. Dirk can best establish
the value of the Mustang with his insurer by attaching which one of the following
endorsements to his PAP? - Answer-coverage for damage to your auto (max limit of
liability)
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