Money Study Guide 2- Final
A disadvantage of leasing
additional costs for turning the car in early
Assigned Benefits
insurance pays your doctor or hospital directly
If you sell your home without a real estate agent, you should still employ the services of a ________ to assist you with the contract and the closing
lawyer
class-action suits
legal action taken by a few individuals on behalf of a group
Liability
legal responsibility for financial cost of another person's losses or injuries
Points
prepaid interest charged by the lender each is equal to 1% of the loan amount and represents the premium you pay to obtain a lower mortgage rate
For about ________ homeowners can obtain $10,000 coverage for sewage and drain backup damage
$100 a year
Fixed Operating costs of a vehicle
- annual depreciation - automobile insurance - License plate costs
Reasons for the increase of costs in health care
- expensive technologies - duplication of tests - increasing variety of treatments - unnecessary tests -increasing elderly people
Services of a Real Estate Agent
- show you homes in areas based on needs and preapproved mortgage amount - Presenting your offer to the seller based in a market analysis - negotiating a purchase price - assisting you in obtaining financing -representing you at the closing
Private Mortgage Insurance (PMI)
-a special policy that protects the lender in case the buyer cannot make payments or cannot make them on time - usually required if the down payment is less than 20%
To qualify for disability income under social security, you must be totally disabled for _____ months or more, and you must be unable to do any work.
12
Up until what age can young people remain on their parent's insurance policy
26
A former spouse's medical plan can be continued for _______ months if the former spouse works for a company with 20 or more employees
36
Medicare
A federal program of health insurance for persons 65 years of age and older, people of any age with kidney failure, and people with certain disabilities
Rate Cap
A limit on the increases and decreases in the interest rate charged on an adjustable-rate mortgage. protects the borrower by limiting how much an adjustable-rate mortgage (ARM) product may change or adjust during any single interval.
Coordination of Benefits
A method of integrating the benefits payable under more than one health insurance plan
Strict Liability
A person is held responsible for intentional or unintentional actions
Speculative Risk
Chance of loss or gain (ex: starting a small business of gambling)
Alia Maxwell is required to pay 20 percent of her medical costs after the deductible has been paid. What is this requirement called?
Coinsurance
Because you feel young and healthy now, you may overlook the very real need for which type of insurance?
Disability income
Negligence
Failure to take ordinary or reasonable care, such as failure to supervise children in a pool
Buying Influences- Personal
Gender, age, occupation, income, education, marital status, family size
Which of the following is not a provider of health insurance?
Health Insurance Industry Association
Which health insurance policy pays benefits only when you are hospitalized, but pays these benefits in cash which you can use for medical, nonmedical, or supplementary expenses?
Hospital Indemnity
Which statement is not true about no-fault insurance systems
In recent years, all 50 states had some variation of the system
Buying Influences- Economic
Inflation, Interest rates, tax rates, government regulations, product safety
Which of the following would be an advantage of leasing a vehicle?
Lease Payments are likely to be lower than loan payments
Buying Influences- Social
Lifestyle, interests, hobbies, peer group, culture, advertising, media
LTV
Mortgage lenders may use the LTV in deciding whether to lend to you and to determine if they will require private mortgage insurance .(Loan Amount / Asset Value) * 100
As-Is Warranty
No warranty
What should be in a good health insurance plan
Offer basic coverage for hospital and doctor bills. Provide at least 120 days' hospital room/board. Provide at least $1 million lifetime maximum for each family member. Pay at least 80% out-of-hospital expenses after annual deductible of $1,000 per person or $2,000 per family. Impose no unreasonable exclusions. Limit out-of-pocket expenses to $4,000 to $6,000.
Dread Disease
Policies purchased to cover a specific disease, such as cancer or heart disease poor value
Medigap is sold or serviced by:
Private insurance companies
When comparing prices, remember that...
Ready to use products have higher prices
Julian Foster has bought a car with extra safety features, including front and side airbags and antilock brakes. How is Julian managing his risk?
Reduction
Which of the following requires large employers to provide health insurance coverage to all employees?
The Tax Cuts and Jobs Act of 2017
Peril
The cause of possible loss, such as fire, windstorms, explosions, robbery, accidents, and premature death
Vicarious Liability
When a person is held responsible for the actions of another person (ex: a parent responsible for their child harming somebody)
Actual cash value (ACV)
a claim settlement method in which the insured receives payment based on the current replacement cost of a damaged or lost item, less depreciation
Replacement Value
a claim settlement method in which the insured receives the full cost of repairing or replacing a damaged or lost item
Medicaid
a program of medical assistance to low-income individuals and families
Pure Risk
a risk that presents the chance of loss but no opportunity for gain (insuring a car)
Comprehensive major medical insurance
a type of major medical insurance that has a very low deductible and is offered without a separate basic plan
with disability income insurance, benefits usually begin...
between 30 and 90 days after the disability occurs
Exclusions and Limitations
conditions, situations, and services not covered by the insurance carrier (ex: cosmetic surgery for medical insurance)
Assigned risk pool
consists of people who are unable to obtain automobile insurance due to poor driving or accident records and must obtain coverage at high rates through a state program that requires insurance companies to accept some of them.
Which are the 'fastest' ways to increase equity in a house
conventional 15- or 20-year mortgage (lower rate than 30-year fixed)
An automobile service contract can:
cover repairs not included in the manufacturer's warranty
Open Dating
describes the freshness or shelf life of a perishable product
The waiting period in disability income is called the ____ period
elimination
Which groups have taken initiatives to contain the costs of care
employers, labor unions, health insurers, health care professionals, and consumers
Warranty of Merchantability
guarantees the product is fit for its ordinary use
Generally, disability income policies with longer periods....
have lower premiums
Which type of repair is more likely to be covered by a new homeowner service contract?
heating and air-conditioning system failure
What factors would increase the amount a person could afford to spend on a home?
income and living costs
Hazard
increases the likelihood of a loss, such as defective house wiring
Warranty of Title
indicates the seller has the right to sell the product
Most home insurance policies provide coverage for minor accidental injuries on your property under:
medical payments coverage
Escrow Account
money, usually deposited with the lending financial institution, for the payment of property taxes and homeowner's insurance
surgical expense insurance
pays part or all of the surgeon's fees for an operation
Which of the following expenses is paid from an escrow account?
property taxes
The purpose of financial responsibility laws is to:
protect the public from physical harm and property damage losses caused by drivers
Renter's Insurance
protection against financial loss due to damage or loss of personal property
Comprehensive Physical Damage
protects car from risks such as glass breakage, falling objects, vandalism, or damage caused by hitting an animal
A good health insurance plan should...
provide at least a $1 million lifetime maximum for each family member.
Disability income insurance
provides payments to replace income when an insured person is unable to work
Personal risks, property risks, and liability risks are types of ____ risk
pure
Most consumer complaints are resolved by:
returning to the original sales location
Small claims court
settles legal differences involving amounts below a set limit
The items produced for a specific retail chain of stores are commonly sold under a ______brand
store
Physician expense insurance coverage excludes which of the following
surgery
How are the majority of the people in the US covered by health insurance
their employer
Calculate Equity in a home
total assets-total liabilities
impulse buying
unplanned purchasing
Mediation
used a third party to negotiate (nonbinding)
Arbitration
uses a third party to make the decision (binding)