Personal Finance: Chapter 6 Review

Pataasin ang iyong marka sa homework at exams ngayon gamit ang Quizwiz!

true

A major advantage to HMOs is their focus on preventive care and wellness.

liability

A type of coverage that protects if someone is injured on your property or due to your actions

false

All risks are avoidable.

false

All risks have serious potential losses and should be managed with risk avoidance or risk transfer.

premium goes up but benefit stays the same

As you age, renewable term life...

false

Driving without a spare tire will usually lead to serious personal risk.

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

your employer

Group life insurance is offered through...

true

Having a home security alarm system can reduce your insurance premium.

primary care physician

Health Maintenance Organizations (HMOs) require that you choose one doctor to be...

gone up

Health insurance premiums and deductibles have done what over the past several years...

false

High-risk pools offer maximum insurance coverage at high cost to poor drivers.

false

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

false

If you have health insurance, you do not have to worry about the costs of health care.

level term

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

true

Insurance agencies can save you money by comparing several companies to find the best deal

personal risk

Losing your leg is what type of risk?

government sponsored health care

Medicare and Medicaid are examples of...

avoiding risk

Not going skydiving is what type of risk strategy

Risk Avoidance

Not participating in a dangerous activity is...

risk assumption

Self-insuring is a form of...

risk avoidance

Stopping behavior that leads to a risk is known as...

the entire financial market

Systemic risk affects...

short term disability insurance

Temporary coverage for nonwork-related illness or injury is covered by...

false

Term insurance is an important part of your permanent life insurance plan.

deductible

The amount of money you must pay before insurance kicks in is called...

health savings account

These accounts allow you to save pre-tax money for health care expenses

major medical

This coverage protects against very serious injury or illness

short-term disability

What insurance protects you if you cannot work due to injury or illness for up to 2 years?

house

What is real property?

comprehensive

What type of coverage will cover your car if it has hail damage?

collision

What type of coverage will cover your car if it is damaged in a wreck or roll over?

permanent life

What type of life insurance gains cash value?

stop-loss

When your insurance policy allows for a maximum out-of-pocket amount, it is known as...

free-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 includes coverage for medical, hospital, and surgery expenses?

umbrella

Which type of coverage gives protection above your normal liability coverage?

true

You can reduce your insurance premium cost by paying annually instead of monthly.

combining coverage, comparison shopping, increasing your deductible

You can reduce your insurance premiums by...

false

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

stop-loss provision

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

home inventory

a list of items of value in your home

loss

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

health insurance

a plan for sharing the risk of medical costs

Renters 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 to an insurance company

risk reduction

finding ways to lower your chance of incurring a loss

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

Homeowners 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 your homeowner's and car insurance

self-insure

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

term life insurance

temporary insurance that pays only a death benefit

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


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