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(37) Mae purchased a life insurance policy from Insurer. When Mae applied for the insurance, Insurer requested that she furnish her complete medical history. Mae knowingly failed to disclose that she had a tonsillectomy (removal of tonsils) when she was a child, and that she now has lung cancer. Insurer would have insured Mae dispite the tonsillectomy, but it would not have insured her had it known of the cancer. In this case
a. Insurer can void the policy due to Mae's concealment of the tonsillectomy
b. Insurer can void the policy due to Mae's concealment of the lungh cancer
c. Insurer cannot void the policy due to Mae's concealment
d. a and b
(37) Gray purchased a standard life insurance policy on her own life, and she named Melvin as beneficiary. Gray misrrepresented to the insurance company that she was 65 years old; Gray was actually 70 years old. The face of the policy was $25,000. Had Gray told the truth, the premium she paid would have purchased a policy with a $20,000 face. If Gray dies, how much will Melvin probably recover?
(37) Victor purchased property insurance on a storage facility that was composed of ten warehouses. The policy insures Victor against burglaries at the facility. In the insurance contract, Victor warranted that he would install a burglar alarm system in all of the warehouses. Victor installed a burglary alarm system in only nine warehouses. In most states
a. the insurer cannot cancel the policy since Victor substantially performed the warranty
b. the insurer cannot cancel the policy if the failure to install the burglar alarm system in one warehous is not a material breach of the warranty
c. the insurer can cancel the contract due to Victor's breach of warranty
(37) Char's insurer intentionally mislead her into believing that her antique Ford was insured for its full restoration value, when in fact it was only insured for "blue book" value, a much lesser amount. Which concept prevents the insurer from paying the lesser amount in case of a loss?
- hmm, at least I think the answer is b. The book says its c but by definition that doesn't make sense :(
(38) Oliver is 40 years old. Oliver wants to buy a life insurance policy that will provide him with a lump sum payment if he is living at age 60. What kind of insurance should he buy?
a. Term insurance
b. Endowment insurance
c. Annuity insurance
(38) Marvin purchased a life insurance policy on his own life and he named Jolene as the beneficiary. Jolene assigned her rights to Last Bank as colateral for a loan. Marvin wants to change the policy to name his brother George as beneficiary. Under these facts
a. Marvin cannot name George as beneficiary without Jolene's consent
b. Marvin cannot name George as beneficiary because George has no insurable interest
c. Jolene could not assign her rights as a a beneficiary to Last Bank
d. Jolene could assign her rights as beneficiary to Last Bank. However, these rights will be terminated if Marvin changes the policy and names George as the beneficiary
(38) Which loss would be covered by a standard form of fire insurance policy?
a. smoke damage that was caused by a clogged fireplace
b. scorching of wallpaper that was caused by a defective electric heater
c. heat damage to corn that was stored in a grain silo
d. damage to a carpet caused by a fire that started when a cigar was accidentally dropped
(38) Mario owns a fire insurance policy on his home. The policy has a coinsurance clause requiring Mario to insure the home for at least 80% of its value. The value of the home is $50,000. Mario insured the home for only $20,000. If the house is damaged by fire and suffers $10,000 damage, how much will the insurance company pay Mario?
(38) Greg owned a standard form of theft insurance on his car. One day, Greg's car was broken into and vandalized. Which loss or damage is covered by the theft insurance?
a. theft of a portable CD player that Greg had hidden under the front seat
b. theft of a leather jacket that was in the trunk of the car
c. damage of the driver's window that was shattered when the thieves broke into the car
d. all of the above
(38) Lisa's car collided with a truck. Lisa's collision insurance has a $10,000 policy limit, and it contains a $500 deductible. Under these facts, how much must Lisa's insurer pay?
(38) Tom's public liability insurance coverage is 25/50/10. Tom was responsible for an accident that injured two people and destroyed another person's car. One party suffered damages $40,000 due to personal injuries, and the other person suffered damages $30,000 due to personal injuries. The accident caused damage worth $15,000 to the other car. How much must Tom's insurer pay?
a. the insurer must pay a total of $50,000 for the personal injuries to the other parties
b. the insurer must pay a total of $70,000 for the personal injuries to the other parties
c. the insurer must pay $15,000 for the damage to the other car
d. the insurer must pay a total of $85,000 for this accident
(38) Alvin is involved in an automobile accident with kristen. Both parties are at fuld. It is determined at trial that Alvin was 75% at fault, and Kristen was 25% at fault. Kristen suffered $100,000 damages. The accident occurred in a state that has adopted comparative negligence. Under these facts, for how much is Alvin liable?
(38) Sarah owned two standard, term life insurance policies. Sarah failed to timely pay the premiums on either policy. Sarah is 90 days delinquent in paying the premiums on policy No. 1; she is 10 days delinquent on paying policy No. 2. Under these facts
a. Policy No. 1 has not lapsed. Sarah is entitled to a 90-day grace period in which to pay the premium
b. Policy No. 2 has not lapsed. Sarah is entitled to a 30-day grace period in which to pay the premium
c. Both policies have lapsed. Sarah is not entitled to a grace period in which to pay premiums
d. Neither policy had lapsed. Sarah is entitled to a 120-day grace period in which to pay the premiums