Chapter 6

home inventory

A list of items of value in your home

health insurance

A plan for sharing the risk of medical costs

risk reduction

Finding ways to lower your chance of loss is ______.

replacement cost

For insurance purposes what you would pay today to replace an item is the _______.

level term

In which type of term insurance policy will the death benefit remain the same?

liability coverage

Insurance protection against injuries suffered by others on your property as a result of your actions

life insurance

Insurance that pays money to the beneficiary upon the death of the insured person

automobile insurance

Insurance that protects a car owner from losses as a result of accidents and other events

homeowner's insurance

Insurance that protects against risk of loss to a home and its contents

risk avoidance

Not participating in a dangerous activity is _______.

risk assumption

Self-insuring is a form of _______.

Short-Term Disability Insurance

Temporary coverage of non work-related illness or injury is covered by ______.

term life insurance

Temporary insurance that pays only a death benefit

beneficiary

The person designated to receive money from a life insurance policy.

False

True or False: If you have health insurance you do not have to worry about the costs of health care.

True

True or false: A major advantage to HMOs is their focus on preventative care wellness

false

True or false: All risks hae serious potential losses and should be managed with risk avoidance or risk transfer.

False

True or false: High-risk pools offer maximum insurance coverage at high cost to poor drivers.

False

True or false: Homeowner's insurance protects a homeowner from fire damage but does not include liability coverage.

False

True or false: Term insurance is an important part of your permanent life insurance plan.

True

True or false: You can reduce your insurance premium cost by paying annually instead of monthly.

False

True or false: You should assume the risk for large expenses and get insurance to cover small and routine costs.

false

True or false: driving without a spare tire will usually lead to serious personal risk.

True

True or false: having a home security alarm system can reduce your insurance premium.

fee-for-service

Which of the following is considered unmanaged care?

term insurance

Which of the following is known as pure insurance?

liability coverage

Which of the following type of coverage would pay for injuries to guests in your home?

basic health care

Which of the following type of health insurance plan include coverage for medical, hospital, and surgery expenses?

stop-loss provision

a clause that provides 100 percent coverage of medical expenses after a certain amount has been paid by the insured

loss

a physical injury, damage to property, or disappearance of property

renter's insurance

a tenant's policy that protects against the loss of personal property in a rented residence

risk transfer

buying insurance to shift the risk of financial loss

risk reduction

finding ways to lower your chance of incurring a loss

permanent life insurance

insurance that provides a death benefit and builds cash value

disability insurance

insurance that provides income to replace a portion of normal earnings when the insured is unable to work due to non work-related injury or illness

umbrella policy

liability coverage above that of your homeowner's and car insurance

self-insure

setting aside money to be used in the event of injury or loss

risk

the chance of injury, damage, or economic loss

Probability

the likelihood of a risk resulting in a loss

premium

the price paid for insurance coverage

risk assessment

the process of identifying risks and deciding how serious they are