WEBCE PRACTICE FINAL TEST 2026
QUESTIONS WITH CORRECT ANSWERS
GRADED A+
◍ junk.
Answer: junk
◍ What type of insurance involves the sharing of risks between two or more
insurance companies?- self-insurance- risk retention insurance- fraternal
insurance- reinsurance.
Answer: - reinsuranceExplanation:Reinsurance is the transfer of insurance
risk from the primary insurer, known as the ceding company, to another
insurer, known as the reinsurer. With the purchase of reinsurance, the
primary insurer transfers some or all of its risk.
◍ A disability buy-out policy pays a benefit when the insured isSeriously
injured.Totally disabled.Partially disabled.Temporarily disabled..
Answer: Totally disabled.
◍ With the personal auto policy, physical damage to the insured's covered auto
is provided through:Part APart BPart CPart D.
Answer: Part DExplanation:Part D of the personal auto policy provides
physical damage coverage. protecting against damage or theft to the named
insured's auto caused by collision and other perils. This has also been called
"collision and comprehensive coverage." Part A covers liability, Part B
covers medical payments to others, and Part C covers uninsured and
underinsured motorists.
◍ Annuity income payments are most commonly paid on what schedule?in a
lump sumannuallymonthlyquarterly.
Answer: monthly
,◍ Jeremy leaves his watch at a watch repair shop to have the battery replaced.
When he picks it up, he learns it was accidently damaged beyond repair by
the shop owner, who suggests Jeremy file a claim with his own insurance
company. Is Jeremy's insurer likely to pay this claim?- Yes, because it was
the insured's property that was damaged- Yes, because it does not matter
who or what caused the damage- No, because the policy has a no benefit to
bailee provision- No, because the property was damaged by someone other
than the insured.
Answer: - No, because the policy has a no benefit to bailee
provisionExplanation:The no benefit to bailee provision in a property
owner's property insurance policy clarifies that the insurer is not responsible
for covering property under the care of a bailee.
◍ Group long-term disability (LTD) coverage typically has a maximum
benefit period of:not more than 5 years1 yearat least 2 years3 to 5 years.
Answer: at least 2 years
◍ What are the two types of compensatory damages?- special and punitive-
special and general- general and punitive- specific and general.
Answer: - special and generalExplanation:Compensatory damages are
amounts a party is required to pay to compensate (reimburse) an injured
party for harm the first party caused. The two types of compensatory
damages are special damages and general damages. As opposed to
compensatory damages, punitive damages are amounts a defendant is
required to pay as punishment for committing a civil wrong in an egregious
or deliberate manner.
◍ The medical payments limit of liability shown in the declarations of Candy's
personal auto policy is $2,000. Candy is injured twice in two separate
accidents involving her covered auto. The medical payments expenses for
the first accident are $1,500 and $3,800 for the second accident. What is the
maximum that her policy will pay for expenses resulting from the two
accidents?$2,000$3,500$4,000$5,300.
Answer: $3,500Explanation:The medical payments limit shown in the
, declarations is the maximum that the insurer will pay for each person
injured in a single accident. In this case, her insurer will pay $1,500 for the
first accident and $2,000 (the maximum allowed for an accident) for the
second accident.
◍ Purchasing homeowners insurance to protect against the financial risks of
home ownership is an example of what risk management technique?-
retention- reduction- avoidance- transfer.
Answer: - transferExplanation:When insurance is purchased, the risk of loss
is transferred from the insured to the insurance company in exchange for a
premium payment.
◍ If a market-value adjusted annuity (MVA) is surrendered before the end of
the contract term at a time when current market interest rates are lower than
they were when the annuity was issued, the insurer will:maintain the same
interest rate on the withdrawn funds and charge the normal surrender
chargemaintain the same interest rate on the withdrawn funds and reduce the
normal surrender chargeincrease the interest rate on the withdrawn funds
and charge the normal surrender chargedecrease the interest rate on the
withdrawn funds and charge the normal surrender charge.
Answer: increase the interest rate on the withdrawn funds and charge the
normal surrender charge
◍ Which of the following statements regarding the life insurance return of
premium rider is correct?Interest is included in the returned premium
amount.The rider is available only with whole life insurance policies.It pays
the policyowner a sum equal to all or a portion of the premiums paid if the
insured is alive at the end of the policy term..If the insured dies during the
policy term, the policy face amount is paid to the beneficiary as well as the
sum or premiums paid..
Answer: It pays the policyowner a sum equal to all or a portion of the
premiums paid if the insured is alive at the end of the policy term..
◍ Which of the following will happen if the outstanding balance of a whole
life insurance policy loan, including accrued interest, ever exceeds the
, policy's cash value?The insurer will cancel the policy.The policy will
remain in effect.The policy will be surrendered for cash.The policy will
automatically go on the extended term option..
Answer: The insurer will cancel the policy.
◍ All of the following are commonly excluded from coverage in a property
insurance policy EXCEPT:- water damage- earthquake- wear and tear-
lightning.
Answer: - lightningExplanation:Common exclusions found on property
policies include water damage, earthquake, and wear and tear.
◍ What is the minimum level of Personal Injury Protection (PIP)?$15,000 per
person$30,000 per accident$250,000 per person$500,000 per accident.
Answer: $15,000 per personExplanation:The statutory PIP minimum is
$15,000. All forms of the auto insurance policy must provide this amount of
coverage per person.
◍ An insurance company that exists to cover the risks of the parent
organization that owns it is called a:- stock insurance company- mutual
insurance company- captive insurance company- fraternal insurance
company.
Answer: - captive insurance companyExplanation:A captive insurance
company is established to cover the risks of the parent organization that
owns it. Captives are sometimes formed because traditional insurance
markets are unable to meet the needs of their insureds.
◍ The liability coverage section of a homeowners policy excludes coverage
for watercraft-related losses to all the following EXCEPT:- 40-foot sailboat
owned by the insured- 25-foot sailboat the insured borrows from a friend-
yacht rented to host a business meeting- fishing boat the insured owns and
rents to others for a fishing excursion.
Answer: - 25-foot sailboat the insured borrows from a
friendExplanation:The watercraft liability exclusion does not provide
coverage for sailboats more than 26' long unless borrowed by the insured or
any watercraft rented to others or used for any business purpose.
QUESTIONS WITH CORRECT ANSWERS
GRADED A+
◍ junk.
Answer: junk
◍ What type of insurance involves the sharing of risks between two or more
insurance companies?- self-insurance- risk retention insurance- fraternal
insurance- reinsurance.
Answer: - reinsuranceExplanation:Reinsurance is the transfer of insurance
risk from the primary insurer, known as the ceding company, to another
insurer, known as the reinsurer. With the purchase of reinsurance, the
primary insurer transfers some or all of its risk.
◍ A disability buy-out policy pays a benefit when the insured isSeriously
injured.Totally disabled.Partially disabled.Temporarily disabled..
Answer: Totally disabled.
◍ With the personal auto policy, physical damage to the insured's covered auto
is provided through:Part APart BPart CPart D.
Answer: Part DExplanation:Part D of the personal auto policy provides
physical damage coverage. protecting against damage or theft to the named
insured's auto caused by collision and other perils. This has also been called
"collision and comprehensive coverage." Part A covers liability, Part B
covers medical payments to others, and Part C covers uninsured and
underinsured motorists.
◍ Annuity income payments are most commonly paid on what schedule?in a
lump sumannuallymonthlyquarterly.
Answer: monthly
,◍ Jeremy leaves his watch at a watch repair shop to have the battery replaced.
When he picks it up, he learns it was accidently damaged beyond repair by
the shop owner, who suggests Jeremy file a claim with his own insurance
company. Is Jeremy's insurer likely to pay this claim?- Yes, because it was
the insured's property that was damaged- Yes, because it does not matter
who or what caused the damage- No, because the policy has a no benefit to
bailee provision- No, because the property was damaged by someone other
than the insured.
Answer: - No, because the policy has a no benefit to bailee
provisionExplanation:The no benefit to bailee provision in a property
owner's property insurance policy clarifies that the insurer is not responsible
for covering property under the care of a bailee.
◍ Group long-term disability (LTD) coverage typically has a maximum
benefit period of:not more than 5 years1 yearat least 2 years3 to 5 years.
Answer: at least 2 years
◍ What are the two types of compensatory damages?- special and punitive-
special and general- general and punitive- specific and general.
Answer: - special and generalExplanation:Compensatory damages are
amounts a party is required to pay to compensate (reimburse) an injured
party for harm the first party caused. The two types of compensatory
damages are special damages and general damages. As opposed to
compensatory damages, punitive damages are amounts a defendant is
required to pay as punishment for committing a civil wrong in an egregious
or deliberate manner.
◍ The medical payments limit of liability shown in the declarations of Candy's
personal auto policy is $2,000. Candy is injured twice in two separate
accidents involving her covered auto. The medical payments expenses for
the first accident are $1,500 and $3,800 for the second accident. What is the
maximum that her policy will pay for expenses resulting from the two
accidents?$2,000$3,500$4,000$5,300.
Answer: $3,500Explanation:The medical payments limit shown in the
, declarations is the maximum that the insurer will pay for each person
injured in a single accident. In this case, her insurer will pay $1,500 for the
first accident and $2,000 (the maximum allowed for an accident) for the
second accident.
◍ Purchasing homeowners insurance to protect against the financial risks of
home ownership is an example of what risk management technique?-
retention- reduction- avoidance- transfer.
Answer: - transferExplanation:When insurance is purchased, the risk of loss
is transferred from the insured to the insurance company in exchange for a
premium payment.
◍ If a market-value adjusted annuity (MVA) is surrendered before the end of
the contract term at a time when current market interest rates are lower than
they were when the annuity was issued, the insurer will:maintain the same
interest rate on the withdrawn funds and charge the normal surrender
chargemaintain the same interest rate on the withdrawn funds and reduce the
normal surrender chargeincrease the interest rate on the withdrawn funds
and charge the normal surrender chargedecrease the interest rate on the
withdrawn funds and charge the normal surrender charge.
Answer: increase the interest rate on the withdrawn funds and charge the
normal surrender charge
◍ Which of the following statements regarding the life insurance return of
premium rider is correct?Interest is included in the returned premium
amount.The rider is available only with whole life insurance policies.It pays
the policyowner a sum equal to all or a portion of the premiums paid if the
insured is alive at the end of the policy term..If the insured dies during the
policy term, the policy face amount is paid to the beneficiary as well as the
sum or premiums paid..
Answer: It pays the policyowner a sum equal to all or a portion of the
premiums paid if the insured is alive at the end of the policy term..
◍ Which of the following will happen if the outstanding balance of a whole
life insurance policy loan, including accrued interest, ever exceeds the
, policy's cash value?The insurer will cancel the policy.The policy will
remain in effect.The policy will be surrendered for cash.The policy will
automatically go on the extended term option..
Answer: The insurer will cancel the policy.
◍ All of the following are commonly excluded from coverage in a property
insurance policy EXCEPT:- water damage- earthquake- wear and tear-
lightning.
Answer: - lightningExplanation:Common exclusions found on property
policies include water damage, earthquake, and wear and tear.
◍ What is the minimum level of Personal Injury Protection (PIP)?$15,000 per
person$30,000 per accident$250,000 per person$500,000 per accident.
Answer: $15,000 per personExplanation:The statutory PIP minimum is
$15,000. All forms of the auto insurance policy must provide this amount of
coverage per person.
◍ An insurance company that exists to cover the risks of the parent
organization that owns it is called a:- stock insurance company- mutual
insurance company- captive insurance company- fraternal insurance
company.
Answer: - captive insurance companyExplanation:A captive insurance
company is established to cover the risks of the parent organization that
owns it. Captives are sometimes formed because traditional insurance
markets are unable to meet the needs of their insureds.
◍ The liability coverage section of a homeowners policy excludes coverage
for watercraft-related losses to all the following EXCEPT:- 40-foot sailboat
owned by the insured- 25-foot sailboat the insured borrows from a friend-
yacht rented to host a business meeting- fishing boat the insured owns and
rents to others for a fishing excursion.
Answer: - 25-foot sailboat the insured borrows from a
friendExplanation:The watercraft liability exclusion does not provide
coverage for sailboats more than 26' long unless borrowed by the insured or
any watercraft rented to others or used for any business purpose.
