Business and Personal Law

Chapter 21: Insurance and Estate Planning

Online Practice Tests

1
The main difference between Medicare and Medicaid is
A)Medicare pays for adults over age 18 while Medicaid pays for children up to age 18.
B)Medicare pays for inpatient hospital care while Medicaid pays for 80 percent of doctors' and other medical services.
C)Medicare is federally funded while Medicaid is state and locally funded.
D)Medicare is provided for all people over age 65, while Medicaid is a healthcare plan for low income people
2
The face value of a straight life insurance policy is the amount of
A)money you want to spend to insure people or property.
B)money you can take by either borrowing against or cashing in the policy.
C)money you pay to the insurance company for the insurance coverage you want.
D)protection stated in a life insurance policy.
3
The main purpose of insurance is to
A)minimize liability and reduce lawsuits.
B)spread the losses among a greater number of people.
C)pass risk to someone else.
D)provide a way for large corporations to make money.
4
For property insurance, the insurable interest must exist
A)at the time of loss.
B)at the time you buy the insurance.
C)when the beneficiary is named.
D)when you make the first payment on the premium.
5
The type of insurance that covers damage to your vehicle from a fire or flood is called
A)liability insurance.
B)physical coverage.
C)comprehensive insurance.
D)collision insurance.
6
A floater policy covers
A)property that constantly changes value or location.
B)pools, boats, or other property that might be damaged by water.
C)furniture in a rental property.
D)automobiles that purchased used.
7
The least expensive type of life insurance is
A)straight life.
B)term.
C)whole.
D)limited-payment.
8
When a person dies intestate it means
A)no adult children were intentionally left out of the will.
B)the person died with a will.
C)the laws of the state in which the person resided are void.
D)the person died without a will.
9
A will may be made by any person who is
A)of sound mind and has reach the age of adulthood.
B)self-employed and plans to pass the business to his or her heirs.
C)owns personal property valued at over $10,000.
D)of sound mind and over 16 years of age.
10
A testamentary trust is a trust
A)that comes into existence while the settler is alive.
B)that establishes a charitable purpose.
C)created by a will.
D)that is protected from being spent recklessly by the beneficiary.
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