chapter 8-9 insuring your life and health
Many airline passengers purchase a special life insurance policy frequently sold at the airport. This is an example of a(n) _______ policy.
Accident
Workers' compensation is a state program that provides benefits for
Workers suffering injury or illness on the job
Underwriting helps protect life insurance companies from which of the following:
adverse selection
Insurance is a tool that can lessen ________ risk.
economic
Variable life insurance if most often the best plan for most people's primary insurance needs.
false
having a fire extinguisher in your home is an example of loss prevention
false
The underwriting function is designed to be sure that premiums are based on
the chance of loss
Life insurance needs change dramatically over one's lifetime.
true
Risk is uncertainty regarding economic loss.
true
The basic purpose of insurance is to protect you from the results of accidental losses.
true
The primary purpose of life insurance is to protect family members financially after one's death
true
Advances in medical technology, prescriptions drugs and treatments have substantially reduced the costs health care in recent decades.
False
Disability occurs only when someone is completely incapable of returning to work.
False
OASDHI, sometimes called social security, actually refers to the following:
Old-age, Survivor's, Disability, and Health Insurance
Group health insurance premiums are usually lower than individual health insurance premiums.
True
Health insurance costs have been increasing at a rate greater than the CPI.
True
Increasing the deductible is likely to lower the premium on a comprehensive major medical policy.
True
Long-term care insurance can cover both nursing home and home health care.
True
One of the main factors causing the rise in medical costs is the rising average age of the American population.
True
Survivorship (last-to-die) insurance is used primarily to help pay estate taxes.
True
Installing a sprinkler system in your home to reduce insurance premium costs is an example of risk transfer.
false
The life insurance needs of beneficiaries are secondary since most proceeds are paid to living policyholders.
false
Miscellaneous sources of health care coverage include
homeowners insurance. automobile insurance. veterans benefits. all of the above.
A characteristic of dental insurance is
low maximum limits
________ is a factor in rising health care costs.
new drug therapies increasing availability of health care protection technological improvements demand generated by Medicare all of the above.
The majority of employers pay
part of the premium for workers and dependents.
The basic purpose of insurance is to
protect you from losses
Through insurance, society is able to
reduce financial risks and share losses
The probability of a loss occurring can be reduced by
risk assumption
The purchase of insurance is a common form of which risk management technique:
risk transfer
Which of the following forms of life insurance requires the lowest premium per dollar of initial death benefits?
term life insurance
From the standpoint of the person buying insurance, the central purpose of insurance should be:
to transfer risks of serious losses
Annual term insurance premiums increase as you get older while whole life insurance premiums remain constant.
true
The needs approach to evaluate the right amount of life insurance is the most accurate method to determine the proper amount of death benefits.
true
Transferring risk means asking an insurance company to take over the risk for a small payment (the premium).
true
