chapter 20 review insurance

Dana has auto insurance with 100/300 bodily liability coverage. Five people were injured in an accident for which she was at fault. Each injured person received the same amount of benefits from the insurance company, which paid the maximum amount. How much did each person receive? A. $60,000 B. $100,000 C. $300,000 D. $30,000

A. $60,000

Which of the following type of health insurance is probably the MOST expensive A. Individual health insurance B. Group health insurance C. A PPO D. An HMO

A. individual health insurance

Term life insurance A. is the only form of life insurance that is purely life insurance B. has cash value C. is the most expensive form of life insurance D. has an investment feature

A. is the only form of life insurance that is purely life insurance

Which of the following is a type of auto insurance that covers property damage? A. Bodily injury liability B. Comprehensive coverage C. Uninsured motorist D. Medical payments

B. Comprehensive coverage

This type of homeowners insurance does not deduct depreciation when a damaged item is restored. A. No-fault insurance B. Replacement insurance C. All-risk policy D. Basic policy

B. Replacement insurance

A variable life insurance policy A. always has a lower death benefit than cash value B. has no guaranteed cash value C. is the least expensive form of term life insurance D. has variable premiums

B. has no guaranteed

Type of auto insurance that covers people in other cars, passengers riding with the insured, an pedestrians.

Bodily injury liability

The cause of loss to property are called A. Risks B. Hazards C. Perils D. Claims

C. Perils

Regular medical insurance covers A. all or part of a surgeon's fees for an operation B. expenses for your hospital room and other necessary items C. fees for nonsurgical care given in the doctor's office D. all the above

C. fees for nonsurgical care given in the doctor's office

The amount of money that an insurance company will pay if the policy holder decides the insurance is no longer needed.

Cash Value

_________ is the sharing of expenses by the medical policy holder and the insurance company.

Coinsurance

Which of the following factors determine homeowners insurance premiums? A. Value of property insured B. Type of policy C. Credit rating of the insured D. All of the above

D. All of the above

The person named in a life insurance policy to receive benefits is the A. Insured B. Policy holder C. Dependent D. Beneficiary

D. Beneficiary

A person who must rely on another person for financial support.

Dependent

Homeowners are able to buy insurance to protect their personal property; renters are not.

False

If your car suffers $3,500 damage in an accident and your deductible amount is $500, you will have to pay $3,000 to get your car fixed.

False

Medicaid is a national program of health insurance for people age 65 and older.

False

The broad form of homeowners policy insures against ALL perils.

False

The longer you keep your permanent life insurance policy, the lower its cash value will be.

False

Under an assigned-risk plan, people injured in an auto accident collect for their financial losses from their own insurance companies no matter who caused the accident.

False

____________ laws protect the public from financial loss caused by drivers.

Financial responsibility

The most common from of home and property insurance sold today is a(n) _____________ policy.

Homeowners

A financial benefit you receive from another person's continued life.

Insurable interest

A list of personal property that you have insured.

Inventory

With __________ term life insurance, the amount of protection and premiums remain the same; with __________ term insurance, the amount of protection becomes smaller, but premiums remain the same.

Level Decreasing

The two main categories of auto insurance are __________ and __________.

Personal injury Property damage

Property such as furniture or clothing.

Personal property

Type of auto insurance that protects a driver against claims if the insured's car damages someone else's property and the insured is at fault.

Property damage liability

Property permanently attached to land, such as a house or garage.

Real Property

Many insurance companies will pay the current replacement value of property only if the property is insured for at least 80 percent of the replacement value.

True

Most States require drivers to carry certain types of automobile insurance before they can get a license for their car.

True

Personal Liability coverage covers claims from injuries to people or damage to property caused by you or your family.

True

The age of the person being insured affects the premiums for life insurance.

True

The decrease in a property's value due to weather or age.

depreciation

The amount of insurance coverage that was originally purchased and that will be paid upon death of the insured.

face value