Chapter 6 - Personal Risk Management
false
All risks have serious potential losses and should be managed with risk avoidance or risk transfer (true/false)
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?
basic health care
What is a type of health insurance plan that includes coverage for medical, hospital, and surgery expenses
term insurance
What kind of insurance is known as pure insurance?
liability coverage
What type of coverage would pay for injuries to guests in your home?
stop-loss provision
a clause that provides 100 percent coverage of medical expenses after a certain amount has been paid
home inventory
a list of items of value in your home
true
a major advantage of HMOs is their focus on preventive care and wellness (true/false)
loss
a physical injury, damage to property, or disappearance of property
health insurance
a plan for sharing the risk of medical costs
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
false
driving without a spare tire will usually lead to serious personal risk (true/false)
risk reduction
finding ways to lower your chance of incurring a loss
risk reduction
finding ways to lower your chance of loss is _____
true
having a home security alarm system can reduce your insurance premium (true/false)
false
high-risk pools offer maximum insurance coverage at high cost to poor drivers (true/false)
false
homeowners insurance protects a a homeowner from fire damage but does not include liability coverage (true/false)
false
if you have health insurance, you do not have to worry about the costs of health care (true/false)
liability coverage
insurance protection against injuries suffered by others on your property or 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
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 nonwork-related injury or illness
umbrella policy
liability coverage above that of homeowner's and car insurance
risk avoidance
not participating in dangerous activity is _____
risk assumption
self-insuring is a form of ______
self-insure
setting aside money to be used in the event of injury or loss
short-term disability insruance
temporary coverage for nonwork-related illness or injury is covered by ____
term life insurance
temporary insurance that pays only a death benefit
false
term insurance is an important part of your permanent life insurance plan (true/false)
risk
the chance of injury, damage, or economic loss
probability
the likelihood of a risk resulting in a loss
beneficiary
the person designated to receive money from a life insurance policy
premium
the price paid for insurance coverage
risk assessment
the process of identifying risks and deciding how serious they are
fee-for-service
what is an example of unmanaged care?
true
you can reduce your insurance premium cost by paying annually instead of monthly (true/false)
false
you should assume the risk for large expenses and get insurance to cover small and routine costs (true/false)
