Ramsey Pre-test Insurance

Which of the following is true?

Any kind of duplicate insurance coverage is a bad idea.

The recipient of assets passed on from the death of a friend or relative

Beneficiary

Which of the following policies would be a duplicate coverage for your health insurance policy?

Cancer and hospital indemnity insurance

Which of the following statements about life insurance is true?

Cash value insurance is normally for life and is more expensive than term life insurance because it funds a savings plan.

Paperwork filed with an insurance company in order to get them to cover a loss for someone they insure

Claim

An amount of money you pay to help cover a portion of your medical costs

Co-payment

Applies to the amount of protection you have through an insurance company in the event of a loss

Coverage

Amount you must pay before you begin receiving any benefits from your insurance company

Deductible

Which of the following statements about disability insurance is false?

Disability insurance is not necessary if you have a good health insurance policy

Which of the following is not a recommended way of lowering your car insurance premiums?

Drop your auto insurance altogether

The time between the disabling event and the beginning of payments in your disability coverage is called:

Elimination period

After high school, you should have the following types of insurance: auto, renter's, health and long- term care insurance

False

Disability insurance offered through your employer is usually the most expensive coverage option.

False

Prepaid burial policies are a good idea.

False

Renter's insurance is not necessary if you don't have a lot of expensive things.

False

Which of the following is not a recommended way to save on your health insurance premium?

If you are young and healthy, you do not need health insurance.

Insurance that covers property damage and medical bills if you are at fault in a car accident or if someone gets hurt on your property

Liability

You are involved in a two-car accident in which you are at fault. The other driver is injured and your insurance covers the medical expenses of the victim. This type of insurance coverage is called:

Liability

Which of the following types of insurance is not recommended for a young single adult?

Life insurance

Specific amount of money that you pay when insurance only covers a portion of costs

Out-of-pocket expense

Describes the type of coverage in an insurance agreement

Policy

The amount you pay monthly, quarterly, semiannually or annually to purchase different types of insurance

Premium

Life insurance policy for a specific period of time is called:

Term

A person becomes self-insured when:

Their kids are grown, they have no debt, and they have fully funded retirement

The purpose of insurance is to:

Transfer financial risk

Any insurance with cash value or that combines insurance with investments is a bad idea.

True

Comprehensive coverage takes care of damage to your car that is not caused by a collision.

True

Duplicate coverage, or any extra insurance on top of your existing insurance, is not necessary.

True

Following the Five Foundations will help you to, one day, become self-insured.

True

Good identity theft protection includes restoration services.

True

You should not buy identity theft protection that only provides credit report monitoring.

True

A legally enforceable declaration of how a person wishes his or her property to be distributed after death

Will

Which of the following would not be a huge financial risk (and, therefore would not require insurance) if you had a full emergency fund of $500 or more?

You lose your cell phone

Which of the following is not a benefit of having a will?

You only need a will if you have a large estate.

Which of the following statements about long-term care insurance is false?

You should not buy long-term care insurance until age 30.