Personal Finance Final Exam

Which of the following is not true as it relates to the cost of health care?

Better claim handling and processing has helped reduce the cost of health care

Hospitals, doctors, and patients have enough incentive to make the most economical use of health care services.

False

Since most workers have employer-sponsored disability coverage and are also eligible for Social Security and worker's compensation, there is very little demand or need for individual disability insurance.

False

Technological advances are one of the things helping to keep the cost of health care from escalating further.

False

The best disability plans pay you if you are not able to work at any job, not just your regular job.

False

The constitutional beneficiary is the person who will receive the death benefits if the primary beneficiary is no longer living when the policyholder dies.

False

The only reason a person would buy life insurance is to eliminate or substantially reduce the financial consequences of that person's death by providing income to his or her dependents.

False

Certain federal regulations ensure that individuals can maintain continuous health care coverage.

True

Life insurance may not be that important for a couple who both work full-time and who could each be self-sufficient without the other person's income.

True

Most people obtain health insurance through group plans offered by employers.

True

Private health insurance plans contain all of the following coverage, except

nursing home insurance

Life insurance may be obtained through all of the following except

the federal government

How much would be owed by the patient on a $3,000 bill if a PPO uses a discount on charge arrangement wherein the percentage paid to the provider is 70% and the patient's co-pay, as specified by the PPO, is 20 percent?

$420

Unfortunately, you have had several medical procedures in the current year with the following bills, $2,000, $9,200, $18,000, $5,000, and $3,500. Your deductible is $2,400, after which your co-pay is 10%. Your policy also includes a $6,000 out-of-pocket maximum clause. How much of the total bills are you responsible to pay?

$5,930

Tom purchased disability insurance that will provide $1,400 per month in benefits. His employer carries a disability policy on Tom that will provide an additional $600 per month in benefits. If Tom's monthly budget is $2,500 and Tom is anticipating no additional disability benefits from any other source, what is Tom estimating as his work-related monthly expenditures.

$500

How much of a $2,000 medical bill would you pay if your policy contains a $400 deductible and a 10% coinsurance clause?

$560

Which of the following is not true regarding employer disability insurance?

Disability benefits are provided for very long periods, usually up to 30 years

Which of the following is not true about disability insurance?

Employer paid disability insurance policies continue in force after you have separated from the employer

Because of COBRA, you can continue to remain covered by your employer's health insurance plan for no more than one year after you stop working for your employer.

False

Buying health insurance through employer-sponsored plans is somewhat more expensive than buying your own policy individually.

False

Which one of the following benefits is most often available through an employer?

Health insurance

Which of the following is a reason to buy life insurance?

Provide a college fund for your children in the event of your early death

Which of the following is not a disadvantage of an HMO plan versus a PPO plan?

The HMO plan may be less expensive

Life insurance proceeds are generally not taxable to the

beneficiary

If you buy a term insurance policy with a conversion option, this means that you

can convert your term policy to a whole life policy during the conversion period

Regarding the definition of disability,

it varies from one disability policy to another

Life insurance affects everything except your

life expectancy

In purchasing disability insurance, you should consider all of the following except the

probationary period

If you are no longer covered under your parents' or guardian's health insurance plan, the Affordable Care Act requires you to

purchase an individual health insurance plan or face a tax penalty

The cost of health care has risen dramatically in recent years due to all of the following, except

reduced litigation costs

Disability income is

tax-free if you pay the disability insurance premiums

Life insurance would be necessary in all of the following situations, except

you are single and have no dependents