Accounting
Anthropology
Archaeology
Art History
Banking
Biology & Life Science
Business
Business Communication
Business Development
Business Ethics
Business Law
Chemistry
Communication
Computer Science
Counseling
Criminal Law
Curriculum & Instruction
Design
Earth Science
Economic
Education
Engineering
Finance
History & Theory
Humanities
Human Resource
International Business
Investments & Securities
Journalism
Law
Management
Marketing
Medicine
Medicine & Health Science
Nursing
Philosophy
Physic
Psychology
Real Estate
Science
Social Science
Sociology
Special Education
Speech
Visual Arts
Law
Q:
The right to pay off the mortgage in full, including interest, and thus discharge the debt in total is called the equity of mortgage.
Q:
Fred Farmer is entitled to a jury trial when Big Bank attempts foreclosure on his farm.
Q:
The mortgagee has the unrestricted right to sell, assign, or transfer the mortgage to a third party.
Q:
If Enrico purchases a house that is already mortgaged and takes the house subject to the mortgage, the seller of the house agrees to continue paying the debt.
Q:
Furniture loans, home improvement loans, student loans, construction loans are examples of mortgage-backed securities.
Q:
A security interest is perfected when the secured party has a legally enforceable right to take the property and sell it to satisfy the debt.
Q:
If a mortgage is not recorded and a later mortgage is given on the same property, the new mortgage is superior to the first.
Q:
Only personal property can be used to secure a debt.
Q:
Linda puts up her land as collateral for a loan from Small Bank. Linda is a mortgagee.
Q:
A conventional fixed-rate mortgage involves no government backing by either insurance or guarantee.
Q:
By taking a graduated-payment mortgage, Jake will pay a fixed interest rate and make increased monthly payments over the term of the loan.
Q:
A reverse mortgage is a type of loan that allows older home owners to convert some of the equity in their home into cash while retaining ownership of their home.
Q:
A deed of trust is foreclosed by court action.
FALSE
The provisions of many deeds of trust allow the trustee to sell the property without going to court. For this reason, some legal authorities do not consider a deed of trust a true mortgage, because true mortgages require a foreclosure action for the sale of the property.
Q:
When a borrower does not qualify for one of the regular mortgages just covered, he or she might ask for and receive a subprime loan.
Q:
Juanita's grandfather loans valuable artwork to the Art Museum on the condition that the same will go to Juanita if the museum closes. She wants to purchase property insurance on the art work because she feels that it would be a great loss if any mishap occurs. Discuss the legal implications of this situation.
Q:
Malone purchased a painting by Van Gogh and took out a $1 million insurance policy on it. He later sold the painting but continued to make payments on the policy. When the painting was destroyed by vandals, Malone tried to collect $1 million from the insurance company. Evaluate the situation.
Q:
Logan's building has a replacement cost of $500,000 and his fire insurance policy has an 80% coinsurance clause. Logan has $200,000 of insurance on the building which is completely destroyed by fire. Discuss how much Logan will collect from the fire insurance policy.
Q:
Melinda hits a hole in the road while driving down the highway. Her car's axle breaks resulting in $2,500 of damages. Discuss if Melinda has coverage under any form of auto insurance.
Q:
Lane mails a $600 check for his $50,000 home policy with Surround Insurance Co., two months late. Surround cashes the check. Two weeks later, the house is destroyed by fire. When Lane attempts to collect the $50,000 in policy proceeds, Surround asserts that the policy had lapsed and offers to refund the $600 payment. Discuss the legal rights and obligations of Lane and Surround Insurance Co.
Q:
At 18, Jackson purchased a straight life insurance policy with a face value of $20,000. At a later time, he borrows a loan value against the cash surrender value of the policy. However, Jackson dies unexpectedly while the loan is still outstanding. Discuss the case.
Q:
Grant, a construction worker, purchased a double indemnity option from his life insurance company. Several years later, Grant was seriously injured in a construction accident. Four months after the accident, Grant died as a result of the bodily injuries he sustained in that accident. When Grant's wife, the beneficiary, attempted to collect double the amount of the policy, the insurer informed her that she was only entitled to the original amount of coverage. Analyze the case.
Q:
Taft takes out an insurance policy on his wife, Kathryn, when he learns that she is to be stationed in another country that is at war. She gets killed while on duty in the war zone. Can Taft collect on the life insurance policy? Explain.
Q:
In most states an innocent misrepresentation by the insured would make the policy:
A. voidable by the insurer.
B. voidable by the beneficiary.
C. enforceable since there was no intentional misconduct.
D. enforceable to a reasonable amount as determined by the court.
Q:
While Leah and Grant were lawfully married, Leah had purchased a $500,000 life insurance policy on Grant's life, naming herself as the beneficiary. Subsequently they got divorced and Grant died a year later. Grant leaves two surviving children, Tom and Cindy. Who is likely to receive the proceeds of the $500,000 life insurance policy?
Q:
Titan Insurance Co. pays the damages for Anna's car. The damages were a result of an accident caused by Earl, who was drunk while driving. Discuss Titan's legal rights in this situation.
Q:
The insurance company's liability under comprehensive coverage is limited to the _____ of the vehicle at the time of the loss.
A. actual cash value
B. outstanding loan value
C. replacement value
D. stated value
Q:
Peter lost control of his car and drove it though his neighbor Clyde's fence. If Clyde were to bring a claim against Peter for the damage to the fence, what type of insurance would Peter need to cover the damage?
A. Homeowner's insurance
B. Property damage liability insurance
C. Collision insurance
D. No-fault insurance
Q:
An uninsured motorist drove though a red light and hit the passenger side of David's car. David, the driver, suffered a concussion, and the passenger, Jayne, broke her right arm and leg. David's car sustained extensive damages that would cost $2,000 to repair. If David has uninsured-motorist insurance, the coverage will:
A. protect David, but not Jayne.
B. protect David and Jayne and reimburse David for the $2,000 in damages to his car.
C. protect David and Jayne but not cover any of the damages to David's car.
D. cover any injuries sustained by the uninsured motorist, to prevent the motorist from suing David.
Q:
Stanley falls in the low-income group. Which of the following health care plans can Stanley opt for?
A. Medicaid
B. Long-term care insurance
C. Medicare
D. Mediclaim
Q:
A(n) _____ will provide temporary insurance coverage until the policy is formally accepted.
A. premium
B. adhesion contract
C. warranty
D. binder
Q:
Joe had made an agreement with Auto Insurance Co. not to use his van for commercial business purposes when he purchased auto insurance. Joe had an accident while delivering pizzas for Bigger Pizza Inc. For which type of violation will Joe not be covered under his insurance?
A. Fraudulent concealment
B. Misrepresentation
C. Concealment
D. Breach of warranty
Q:
A(n) _____ is an amount of any loss that is to be paid by the insured and can be a specified dollar amount, a percentage of the claim amount, or a specified amount of time that must elapse before benefits are paid.
A. loan value
B. deductible
C. annuity
D. cash surrender value
Q:
Which of the following is true of coinsurance?
A. It can be purchased to protect both real and personal property.
B. It allows the insured to pay an extra premium initially in exchange for a guaranteed option to buy more insurance at certain specified times later.
C. It excuses the insured from paying premiums if he or she becomes disabled.
D. It is a provision under which the insurer and the insured share costs, after the deductible is met, according to a specific formula.
Q:
A protection that insures property that cannot be covered by specific insurance because the property is constantly changing in either value or location is a(n):
A. floater policy.
B. collision insurance.
C. annuity.
D. coinsurance.
Q:
Lucia had a homeowner's insurance policy on her house. While she was away on vacation, her porch got burned to the ground. After the fire, her house was burglarized and goods worth thousands of dollars were stolen from it. When Lucia arrived home, she called the police. While a police officer was interviewing her in her dining room, a chandelier fell on him and knocked him unconscious. Which losses will Lucia's homeowner's policy cover?
A. The losses due to theft and the injuries sustained by the officer, but not the losses incurred by the fire.
B. The losses due to fire and the injuries sustained by the officer, but not the losses incurred by theft.
C. The losses incurred due to fire and theft but not the injuries suffered by the police officer while on her property.
D. The losses incurred due to fire and theft as well as the injuries suffered by the police officer while on her property.
Q:
_____ permits a driver to buy optional coverage such as personal injury insurance that would allow him or her to receive payment without bothering to determine fault.
A. Comprehensive coverage
B. Add-on coverage
C. Threshold coverage
D. Collision coverage
Q:
Bill has a $500,000 life insurance policy naming his minor children as beneficiaries. However, Bill and his business partner, Marcy, are convicted for fraudulent business transactions. Will Bill's children be able to collect the life insurance proceeds?
A. No, policies often do not cover the insured when he/she violates the law.
B. Yes, as it would not be against public policy for beneficiaries to receive insurance proceeds in such a case.
C. Yes, but not entirely. They will be given an allowance for necessaries with the balance going to Marcy's heirs.
D. No, all the proceeds will go to a state administrated crime victims' fund.
Q:
If an insured purchases a guaranteed insurability provision on a life insurance policy:
A. the insured is allowed to pay an extra initial premium in exchange for an assured option to buy more insurance at certain specified times later with no questions asked.
B. the insurer is allowed to excuse the insured from paying premiums if the insured becomes disabled.
C. the insured has to pay an extra $25 in exchange for a guarantee of coverage by the insurance should the insured become disabled.
D. the insurer has to pay double the amount of the policy to the beneficiary if the insured dies from accidental causes.
Q:
Universal life insurance allows the policy owner to modify:
A. face value of the policy and the premiums.
B. face value of the policy but not the premiums.
C. premiums but not the face value of the policy.
D. face value of the policy and obtain refunds of premiums already paid.
Q:
_____ offers protection alone, and is the least expensive kind of life insurance.
A. Straight life insurance
B. Universal life insurance
C. Limited-payment life insurance
D. Term insurance
Q:
Sagan forgets to list in his health insurance application that he broke his arm at age five. He is not guilty of fraudulent concealment.
Q:
When the insurance company gives up one of its rights to help the insured, the company has made a waiver.
Q:
The _____ accepts the risk of loss in return for a premium.
A. insured
B. insurer
C. beneficiary
D. benefactor
Q:
Kaycee obtains fire insurance on an empty warehouse. Later Kaycee manufactures and stores fireworks in the building. A lightning strike in a thunderstorm explodes the fireworks and destroys the building. The fire insurance policy is:
A. valid since the building was empty when the policy was obtained.
B. void since a material change in risk occurred.
C. voidable if the lightning was not foreseeable.
D. valid since there are negligible liabilities which applies to storing fireworks.
Q:
Faith owes $50,000 to Investment Lenders Inc., a partnership of Cindy and Ryan. She is also a partner with Tom in a business venture. What insurable interests exist in this situation?
A. Faith has an insurable interest in Cindy and Ryan's lives.
B. Investment Lenders Inc. has an insurable interest in Tom, but does not have an insurable interest in Faith.
C. Only Tom and Faith have insurable interests.
D. Tom and Faith have insurable interests in each others' lives and Investment Lenders Inc. has an insurable interest in Faith.
Q:
What type of insurance policy requires the payment of premiums throughout the life of the insured and pays the beneficiary the face value of the policy upon the insured's death?
A. Limited-payment life insurance
B. Universal life insurance
C. Straight life insurance
D. Term life insurance
Q:
Coinsurance covers goods that are moved by land carriers such as rail, truck, and airplane.
Q:
Property insurance can be made less expensive by the use of a deductible.
Q:
David's house suffers $5,000 of water damage due to the fire department fighting a fire at his house. David may recover for this loss under his fire insurance policy.
Q:
Under liability insurance, the insurer is liable for damages up to the limit of the insurance purchased.
Q:
If Viva has low income she will qualify for Medicare, a federally funded health insurance program.
Q:
To avoid risk while waiting for an insurance policy to be formally accepted, an insured may choose to have the insurer issue a binder to provide interim coverage.
Q:
Tia is severely injured in an auto accident and dies four months later from these injuries. Her beneficiaries may collect under a double indemnity provision.
Q:
If an insured person becomes disabled, he or she will be excused from paying premiums if he or she has purchased a waiver-of-premium option.
Q:
The cash surrender value of life insurance equals the face value of the policy at the age of ninety-five or hundred years.
Q:
During inflationary times, when bank interest rates are high, insurance policies are usually poor sources for loans at low interest rates.
Q:
Decreasing term insurance reduces the premium over time.
Q:
An individual takes out a typical life insurance and commits suicide three years later. The beneficiary may collect the insurance.
Q:
Johnny pays $600 for six months of automobile insurance. This payment is called the policy.
Q:
A policy is an unconditional promise to pay money.
Q:
Ted, one of the consultants in a two-man business, cannot take life insurance on his business partner, Brendan, because he does not have an insurable interest in Brendan's life.
Q:
Insurance companies have the right to step into the shoes of the party they compensate and sue any party whom the compensated party could have sued.
Q:
Carl takes out insurance on his life and names a homeless stranger, Troy, as beneficiary. Troy can collect the life insurance when Carl dies.
Q:
Josie writes a check on January 15 to Rusty Enterprises but later realizes that the merchandise she purchased was of poor quality. She gives a stop payment order to the bank on January 20. Her bank has the check in its possession and is accepting it as she completes her stop payment order. Her bank pays the check and Josie demands that her account be recredited. Discuss the legal aspects of this situation.
Q:
Dreamwork Bank uses the substitute check procedure to rapidly obtain payment of items deposited by its customers. An employee of the bank fraudulently alters some substitute checks so they are for greater amounts than the original paper check and embezzles the difference. Discuss the bank's warranties in this situation.
Q:
Jill's account with Small Bank is improperly charged with a $3,000 substitute check that was actually Bob's check drawn on Small Bank. Discuss Jill's legal rights and what she must do to rectify this situation.
Q:
Al is considering making a purchase from an online merchant. Discuss the relative advantages Al has if she uses a credit card or a debit card for the purchase.
Q:
Insurance is a transfer of the risk of economic loss from the insured to the insurance company.
Q:
Linda's checkbook is stolen on January 1 and three checks are forged on her account at Strata Bank. This first appears on a bank statement delivered to her on February 15 but Linda does not examine the statement until March 5. She reports the forgery to the bank on March 6. The other two forged checks do not appear on other bank statements until April 15 and Linda reports them to the bank on April 20. Discuss the case,
Q:
Oliver wrote a check to Greg Motors for $4,000 drawn on Uphill Bank in payment for a secondhand car. Greg Motors deposited the check in its account at Seventh Day Bank, which sends the check to Uphill Bank for collection. Oliver's car broke down before he reached home that evening, and he contacted his bank to stop payment on the check. Discuss what Uphill bank must do with the check to ensure a stop payment.
Q:
The Identity Theft Penalty Enhancement Act added a new crime called _____ to the original statute.
A. aggravated identity theft
B. fraudulent misrepresentation
C. uttering
D. identity violation
Q:
Small Bank mistakenly dishonors a $5,000 check written by its customer Wanda to Hyram Real Estate as a down payment for a new home. As a result of the dishonor Wanda's closing is delayed by thirty days. She incurs $500 extra rental expenses, $1000 in attorney's fees and home mortgage interest rates increase by one half percent before her closing. Hyram deposited the $5,000 check in its account and suffered $300 in NSF charges when credit for the deposit was withdrawn. Discuss the liability of Small Bank to Wanda and Hyram.
Q:
Ashton Bank knows that its customer, Juan, has died. One day after Juan's death, Ashton Bank was presented a check for clearing of $3000. The check was written by Juan a week prior to his death to Bailey Enterprises. Discuss the legal rights of Bailey Enterprises.
Q:
Chambers wrote out a check to Smith for $300. Smith attempted to cash the check at Chambers's bank, but the bank refused to honor it even though there was enough money in Chambers's account. Can Smith sue the bank for refusing to honor the check? Explain.
Q:
While cleaning out her desk, Chen found a certified check she had received eight months earlier and had forgotten to cash. When she brought the check to the bank on which it was drawn, the bank refused to cash it. Discuss the legal rights of the parties in this case.
Q:
If a bank uses a substitute check it makes which of the following warranties?
A. It is not a legal equivalent of the original check.
B. It contains an accurate image of the front and back of the original check.
C. The drawer, indorser, or the depositary bank will be asked to pay a check that has already been paid.
D. Original checks have to be presented to the drawee bank for payment.
Q:
A consumer has the right to claim an expedited credit if the customer asserts in good faith that:
A. the bank charged the consumer's account for a substitute check that was not given to the consumer.
B. the check was not properly charged to the consumer's account.
C. the consumer did not suffer a resulting loss.
D. the production of another substitute check is necessary to determine the validity of any claim.
Q:
Tammy's ATM card is stolen. If she notifies the issuer of the card of the theft within two business days of theft, Tammy will be liable for:
A. $50 of unauthorized use.
B. $100 of unauthorized use.
C. $500 of unauthorized use.
D. $1000 of unauthorized use.
Q:
_____ is a system in which funds are electronically transferred from a customer's checking account, eliminating the need to process a paper check.
A. Electronic fund transfer
B. Electronic check transfer
C. Electronic check conversion
D. Electronic teller system
Q:
Planter, Inc., sold $100,000 in plants and plant supplies to the Ace Corporation. When the supplies were delivered to Ace, Ace ordered its bank, Fourth National, to pay $100,000 to Planter. Fourth National debited Ace's account and ordered Chase Superior, Planter's bank, to credit Planter's account for $100,000. In this transaction:
A. Planter is the originator and Ace is the beneficiary.
B. Ace is the originator and Chase Superior is the beneficiary.
C. Ace is the originator and Planter is the beneficiary.
D. Fourth National is the beneficiary and Chase Superior, the originator.