finance test 3
A person who is named to receive the proceeds from a life insurance policy is a(n) A- Contract. B- Beneficiary. C- Policyholder. D- Insurer. E- Child.
B
A policy that pays you back for actual expenses is called A- coinsurance plan. B- reimbursement plan. C- deductible plan. D- indemnity plan. E- reasonable and customary plan.
B
After you have reached a certain limit that you must pay for the deductible and coinsurance, the insurance company covers 100% of any additional cost. This is called A- Reimbursement. B- Out-of-pocket limit. C- Deductible. D- Internal limit. E- Indemnity.
B
Cheyenne has a home insured for $300,000. It would cost $320,000 to rebuild her home. If she has home insurance that provides personal property coverage at 70% of value, how much of her household belongings would be covered? A- $120,000 B- $210,000 C- $224,000 D- $300,000 E- $320,000
B
Cindy was contacted by her home insurance agent to discuss ways to decrease her premium. Which of the following should NOT reduce her premium? A- Installing an alarm system. B- Increasing the amount of coverage. C- Installing smoke detectors or a fire extinguisher. D- Increasing her deductible. E- Installing dead-bolt locks.
B
Frank, age 38, was killed in a car accident. Which of the following riders provided an additional benefit for his heirs? A- Waiver of premium disability benefit B- Accidental death benefit C- Guaranteed insurability option D- Cost-of-living protection E- Accelerated benefits
B
If you have a loss due to a flood, A- Your homeowner's insurance should normally cover the loss. B- You must have already purchased special coverage if you live in an area that has frequent floods in order to be covered. C- FEMA (Federal Emergency Management Agency) will automatically provide coverage if this is your second flood loss. D- You need an umbrella policy for coverage. E- Your additional living expenses coverage will apply if you move to an area that has not flooded in one year.
B
If you want to purchase term insurance, you will receive all of the following except A- Protection against loss of life for only a specified term. B- Cash value. C- Temporary insurance. D- A benefit during the period it covers, such as 1, 5, 10, or 20 years. E- A policy whose coverage continues if you stop paying premiums.
B
Katrina was injured in an accident at work. the benefits she will receive to cover part of her income will come from A- a public income insurance program B-workers compensation C- her health insurance plan D- social security E- medicare
B
Liability is defined as A- An insurance program for individuals and households. B- The legal responsibility for the financial cost of another person's losses or injuries. C- Negligence. D- A loss due to physical damage. E- Risk assumption.
B
Monica's employer offers a health insurance plan with a very high deductible. In addition, her employer provides a fund for her to spend specifically on health care. What kind of plan does she have? A- FSA B- HRA C- HSA D- Medicare E- Self-funded health plan
B
Most people buy life insurance to A- Pay off a loan on an automobile. B- Protect the people who depend on the insured from financial losses caused by his or her death. C- Pay for a vacation. D- Spend money. E- Pay taxes.
B
Sandy went to the doctor three times, and each appointment cost $200. Her co-payment was $25 per visit. How much was Sandy required to pay in total for her three visits? A- $25 B- $75 C- $175 D- $200 E- $525
B
The settlement option that pays the life insurance proceeds in equal periodic installments for a specified number of years after your death is called A- Lump-sum payment. B- Limited installment payment. C- Final life payment. D- Life income option. E- Proceeds left with the company.
B
The type of health insurance coverage that may specify the maximum payment amount for each type of operation is A- Dental expense. B- Surgical expense. C- Hospital expense. D- Physician expense. E- Major medical expense.
B
Tim and Tammy are updating their financial plan and are concerned that they might not have enough life insurance coverage for their family, which includes two children, ages 4 and 10. They have determined that their annual income is $70,000 and their net worth is now $150,000. What is the amount of life insurance they should carry using the easy method? A- $140,000 B- $343,000 C- $490,000 D- $700,000 E- $750,000
B
insurance that covers valuable items, such as an expensive musical instrument, is called A- personal liability insurance B- personal property floater C- buildings and other structures coverage D- homeowners insurance E- household inventory insurance
B
sally was driving her own car and collided with a truck. sally sustained 125,000 in injuries, and her passenger had 10,000 in injuries. if her coverage was 100/300/50, what are the total medical expenses the insurance company would pay for this accident? A- 125,000 B- 110,000 C- 1000 D- 100,000 E- 135,000
B
What is the primary purpose of medical expense insurance? A- Protect against death expenses. B- Provide payments to make up for some income of a person who cannot work as a result of injury or illness. C- Pay actual medical costs for illness or injury. D- Pay a salary if an employee is disabled. E- Repay loans if an employee cannot work because of illness or injury.
C
Which of the following should reduce your auto insurance premium? A- Increase your number of claims B- Get a speeding ticket C- Maintain good grades in college D- Decrease your deductible E- Start smoking
C
a medigap policy fills the gap between medicare payments and medical cost not covered by A- medicaid B-hospital and medical service plans C- medicare D- home health care agencies E- private insurance companies
C
homeowners insurance covers all of the following except... A- ADDITIONAL LIVING EXPENSES B- PERSONAL LIABILITY AND RELATED COVERAGE C- AUTOMOBILES D- PERSONAL PROPERTY E- BUILDING IN WHICH YOU LIVE AND ANY OTHER STRUCTURES ON THE PROPERTY
C
if you choose to take responsibility for the negative results of a risk, you are using A- RISK AVOIDANCE B- RISK REDUCTION C- RISK ASSUMPTION D- RISK SHIFTING E- RISK INCREASING
C
of the following, which one is the most positive feature of whole life insurance for a person who wants a more structured way to save? A- B- C- D- E-
C
which of the following households most likely has the greatest need for life insurance? A- adult child living with parents B-single adult living alone C- household with children D- independently wealthy adult E- retired couple with a pension
C
Which of the following is a government health care program? A- Health maintenance organization (HMO) B- Home health care agency C- Hospital and medical service plan D- Medicare E- Preferred provider organization (PPO)
D
Which of the following is a type of motor vehicle insurance available to drivers? A- Wage loss insurance B- Towing and emergency road service coverage C- Rental reimbursement coverage D- All of the above may be available to drivers E- None of the above are available to drivers.
D
Which of the following provisions requires the policyholder to again qualify as an acceptable risk and pay overdue premiums with interest in order to put a lapsed policy back in force? A- Incontestability clause B- Misstatement of age provision C- Naming a beneficiary D- Policy reinstatement E- The grace period
D
homeowners insurance covers all of the following except A- appliance B- clothing C- rental rug cleaner D- theft of jewelry values at 25,000 E- furniture
D
if you choose to insure your home or your vehicle, you are using A- RISK AVOIDANCE B- RISK REDUCTION C- RISK ASSUMPTION D- RISK SHIFTING E- RISK INCREASING
D
this health insurance provision lets your insurer make direct payments to your doctor or hospital A- service benefits B-benefit limits C- exclusions and limitations D- assigned benefits E- internal limits
D
which of the following about individual health insurance policies is not correct. A- they can provide family coverage B-they are used by the self-employed C- they can be purchased directly from the company of your choice D- all insurance companies that offer this type of policy are required to charge the same rates E- they can cover individuals
D
which of the following is correct? A- medical expense insurance provides payments to make up for income of a person who cannot work as a result of injury or illness B-a premium reimburses you for hospital stays, doctors visits and medications C- a premium is the amount your employer will pay for your health insurance coverage D- health insurance plans may reimburse an individual for hospital stays, doctors visits, and medications E- disability income insurance pays actual medical costs
D
which of the following is not correct about renters insurance? A- typical coverage pays only the actual cash value of ones losses B- the broad form covers personal property against perils not specifically excluded in the policy C- the comprehensive form protects personal property against perils not specifically excluded in the policy D- renters insurance covers the building and other structures on the site E- renters insurance is relatively inexpensive
D
which of the following is true about long term care insurance? A- it covers help at home but not in a nursing home B-these plans typically pay for all costs C- the older you are when you enroll, the higher the annual premium D- insurance plans are sold primarily to individuals in the 20-40 age groups E- it covers a stay in a nursing home but not help at home
D
yogi is applying for insurance for his new home. which of the following is correct? A- he should use the actual cash value method for settling claims to receive the full cost of repairing or replacing his personal belongings B- he should insure the building for 75% of its replacement cost C- his personal belongs should be covered with his home at 125% D- he should base the amount of insurance on the price to rebuild or repair the new home E- his insured amount should remain the same as long as he lives in his house
D
A health insurance plan should include all of the following "must-haves" except A- Offer basic coverage for hospital and doctor bills. B- Impose no unreasonable exclusions. C- Limit out-of-pocket expenses to no more than $3,000 to $5,000 per year. D- Provide at least 120 days' hospital room and board in full. E- Provide a lifetime maximum level of coverage of up to $50,000.
E
BARBRA LEFT A SKATEBOARD ON HER FRONT STEPS. HER NEIGHBOR TRIPPED ON THE SKATEBOARD AND WAS INJURED. THE FACT THAT BARBRA DIDN'T PUT AWAY THE SKATEBOARD IS CALLED A- PERIL B- PREMIUM C- RISK D- HAZARD E- NEGLIGENCE
E
Coordination of benefits (COB) provision applies to A- Combining health insurance and disability insurance coverage. B- Combining all group and individual insurance coverages. C- Combining the Health Insurance Portability and Accountability Act of 1996 and COBRA. D- Combining three or more disability policies issued for an individual. E- Combining the benefits of two insurance policies issued for a married couple.
E
Francisco and maria have three children and want to complete a detailed worksheet to determine the amount of life insurance they need to purchase. they will consider factors such as social security and liquid assets. which method are they using to determine their life insurance needs? A- easy method B-dual income, no kids method C- formula calculation method D-nonworking spouse method E-family need method
E
Georgia has a health insurance policy that includes a deductible of $500. If her total bill is $3,000, how much will her insurance pay? A- $0 B- $3,500 C- $5,000 D- $3,000 E- $2,500
E
Homeowner's insurance covers all of the following except A- A detached garage. B- Trees and shrubs. C- A tool shed. D- Personal property. E- All of these are covered.
E
Medicaid covers A- Lab services. B- Skilled nursing and home health services. C- Prescription drugs. D- Eyeglasses. E- All of these.
E
Megan wants to purchase a type of whole life insurance policy that will allow part of her premium to be invested in stock, bonds, or money market funds. Which of the following policies should she buy? A- Adjustable life B- Group life C- Limited life D- Universal life E- Variable life
E
Mildred was diagnosed with terminal cancer and knows that she doesn't have long to live. Which of the following riders would allow her to receive cash now? A- Waiver of premium disability benefit B- Accidental death benefit C- Guaranteed insurability option D- Cost-of-living protection E- Accelerated benefits
E
Personal property insurance covers A- The theft of jewelry valued at $25,000. B- Furniture and appliances, but not clothing or some electronics. C- Clothing and some electronics, but not furniture and appliances. D- All items up to 200% of the insured value of the home. E- Personal property items up to 55-75% of the insured value of the home.
E
Stephanie is the wage earner in a typical family with $40,000 gross annual income. use the easy method to determine how much insurance she should carry. A- 280,000 B- 400,000 C- 430,000 D- 40,000 E- 196,000
E
The type of health insurance coverage that takes up where basic health insurance coverage leaves off is A- Dental expense. B- Surgical expense. C- Hospital expense. D- Physician expense. E- Major medical expense.
E
Tom wanted to receive as many discounts on his home insurance as possible. Which of the following would NOT provide a discount? A- Smoke detector. B- Fire extinguisher. C- Deadbolt locks. D- Alarm systems. E- All of these should provide a discount for Tom.
E
Which of the following is NOT a factor that affects the price a company charges for a life insurance policy? A- The company's cost of doing business. B- The return on its investments. C- The mortality rate it expects among its policyholders. D- The policy features. E- All of these affect the price.
E
Which of the following is a charge you will pay when you purchase a variable annuity? A- Surrender charge. B- Mortality and expense risk charge. C- Administrative fee. D- Fund expense. E- All of these.
E
jenny wants health insurance that sets the amount that she must pay toward medical expense before the insurance starts paying benefits/. she is concerned about a A- hospital indemnity policy B-coinsurance C- vision care policy D- dread disease policy E- deductible
E
the type of health insurance coverage that take up where basic health insurance coverage leaves off is A- dental expense B-surgical expense C- hospital expense D- physician expense E- major medical expense
E
this life insurance is used to pay off debts, such as auto loans, in the event that you die before the debts are paid in full. which of the following is not the best buy for the amount of protection offered for an individual? A- term B- adjustable life C- group life D- endowment life E- credit life
E
which of the following is not a type of permanent insurance? A- ordinary life B- whole life C- cash value D- straight life E- term life
E
coverage 100/300/50
Injuries are covered up to 100,000 per person, 300,000 for all injured parties in the accident
If you choose to wear your seat-belt, you are using a- Risk avoidance. b- Risk reduction. c- Risk assumption. d- Risk shifting. e- Risk increasing.
b
Barbara left a skateboard on her front steps. A windstorm swept the skateboard up and through her window. The windstorm was a a- Hazard. b- Negligence. c- Peril. d- Premium. e- Risk.
c
The most common risks are Personal risks. a- Property risks. b- Liability risks. c- All of these are common risks. d- None of these are common risks. e- References
c
Which of the following questions should one ask when developing a risk management plan? a- What do I need to insure? b- How much should I insure something for? c- What kind of insurance should I buy? d- Whom should I buy insurance from? e- All of these questions should be asked when developing a risk management plan.
e
what is the "nonworking" spouse method?
youngest child - 18 x 10,000
Samantha was driving on the highway during a storm and hail dented her car. This damage would be covered under her A- Uninsured motorist's protection. B- Property damage liability coverage. C- Comprehensive physical damage coverage. D- Medical payments coverage. E- Bodily injury liability coverage.
C
Anna contributes pretax dollars to an account managed by her employer for her health care expenses. If she does not spend all of her money by the end of the year, she may forfeit it. What kind of plan does she have? A- FSA B- HRA C- Medicaid D- Medicare E- Self-funded health plan
A
Bill is worried about being able to pay his premium if he is totally and permanently disabled before age 60. Which of the following riders should he consider? A- Waiver of premium disability benefit B- Accidental death benefit C- Guaranteed insurability option D- Cost-of-living protection E- Accelerated benefits
A
Henry was driving at night and hit a deer running across the road. his damage would be covered under his A- collision coverage B- comprehensive physical damage coverage C- uninsured motorist protection D- bodily injury liability coverage E- medical payments coverage
A
Jenny wants health insurance that sets the amount that she must pay toward medical expenses before the insurance starts paying benefits. She is concerned about a A- Deductible. B- Coinsurance. C- Vision care policy. D- Hospital indemnity policy. E- Dread disease policy.
A
Judy and James have a 4 year old child. they plan to purchase life insurance using this formula: current income x 7 x 70%. which method are they using to determine their life insurance needs? A- easy method B-dual income, no kids method C- formula calculation method D-nonworking spouse method E-family need method
A
Tim and Tammy are updating their financial plan and are concerned that they might not have enough life insurance coverage for their family, which includes two children, ages 4 and 10. They have determined that their annual income is $70,000 and their net worth is now $150,000. What is the amount of life insurance they should carry using the "nonworking" spouse method? A- $140,000 B- $343,000 C- $490,000 D- $700,000 E- $750,000
A
When Stanley was visiting Elaine, he tripped on her front porch step and sprained his ankle. His injuries were covered by A- Elaine's medical payments coverage. B- Stanley homeowner's policy. C- Elaine's health insurance coverage. D- Elaine's life insurance policy. E- The insurance policy of the mason who installed the front porch step 15 years ago.
A
Which of the following is NOT temporary insurance? A- Whole life B- Renewable term C- Conversion term D- Decreasing term E- Multiyear level term
A
after you have reached a certain limit that you must pay for the deductible and coinsurance, the insurance company covers 100% of any additional cost. this is called A- out of pocket limit B-indemnity C- reimbursement D- internal limit E- deductible
A
an insurance company is a _______ business that agrees to pay for losses that may happen to someone it insures A- RISK SHARING B- RISK ELIMINATING C- RISK ASSUMING D- RISK AVOIDING E- RISK REDUCING
A
what is the primary purpose of medical expense insurance? A- pay actual medical cost for illness or injury B-provide payments to make up for some income of a person who cannot work C- repay loans if an employee cannot work because of illness or injury D- protect against death expenses E- pay a salary if an employee is disabled
A
The duration of benefits for a disability income insurance plan can be A- For only a few years. B- Until age 65. C- For life. D- All of these are possibilities. E- None of these is correct.
D
Insurance that covers valuable items, such as an expensive musical instrument, is called A- Buildings and other structures coverage. B- Homeowner's insurance. C- Personal property floater. D- Household inventory insurance. E- Personal liability insurance.
C
Michael is concerned that the health insurance option he is considering plays upon unrealistic fears. he is most concerned about a A- hospital indemnity policy B-stop-loss provision C- dread disease policy D- deductible E- coinsurance
C
Bonnie is most concerned about being able to buy additional insurance without undergoing medical exams. Which of the following riders should she consider? A- Waiver of premium disability benefit B- Accidental death benefit C- Guaranteed insurability option D- Cost-of-living protection E- Accelerated benefits
C
Fran is interested in purchasing a major medical policy that limits the total out-of-pocket amount that she will have to pay. She should consider a A- Copay. B- Coinsurance. C- Stop-loss provision. D- Hospital indemnity policy. E- Dread disease policy.
C
If you have a multiyear level term policy, A- You can convert your policy to a permanent type at the end of the term. B- You policy will continue for one year. C- Your premium will be the same for the duration of your policy. D- Your premium will not increase when you renew it. E- All of the above are correct.
C
Peter has a health insurance policy that includes a deductible of $1,000, a coinsurance of 20%, and a stop-loss of $4,000. If his total bill is $20,000, how much will he pay? A- $1,000 B- $3,800 C- $4,000 D- $4,800 E- $19,000
C
Which of the following about individual health insurance policies is NOT correct? A- They can cover individuals. B- They are used by the self-employed. C- They can provide family coverage. D- All insurance companies that offer this type of policy are required to charge the same rates. D- They can be purchased directly from the company of your choice.
D
Which of the following is NOT a type of permanent insurance? A- Whole life B- Straight life C- Ordinary life D- Term life E- Cash value
D
A young employee is buying individual life insurance and is worried about the impact inflation will have on his life insurance coverage. Which of the following riders should he consider? A- Waiver of premium disability benefit B- Accidental death benefit C- Guaranteed insurability option D- Cost-of-living protection E- Accelerated benefits
D
Albert left his vehicle parked on the street in the front of his house when he went on vacation. While he was gone, his street flooded and his car was severely damaged. This damage would be covered under his A- Uninsured motorist's protection. B- Property damage liability coverage. C- Collision coverage. D- Comprehensive physical damage coverage. E- Bodily injury liability coverage.
D
Brittany and Brandon are both charged 250 for an office visit to the same specialist. Brittany's reimbursement policy has a deductible of 300. once she has met the deductible, the policy will cover the full cost of her visits. Brandons indemnity policy will pay him 150, the maximum amount his plan provides for a visit to any specialist. which of the following is correct? A- Brandon will pay 150 and his insurance company will pay 100 B-Brandon will pay ,ore because Brittany will have the first 300 paid by her policy C- Brittany will pay less because the policy will cover up to 300 for her visit D- brittany will pay more because she must pay the entire bill since she has not met her deductible while Brandon will have part of his bill paid by his policy E- none of these is correct.
D
Georgia is considering between two health insurance policies. One includes a deductible of $600 and the other includes a coinsurance of 20%. If a bill is $4,000, how much will she be required to pay under the policy with the coinsurance? A- $0 B- $120 C- $600 D- $800 E- $4,000
D
Holly and Matt want to use the "nonworking" spouse method to determine the amount of life insurance coverage they need. If their youngest child is 5 years old, how much do they need? A- $13,000 B- $18,000 C- $50,000 D- $130,000 E- $180,000
D
If you are concerned that your disability insurer may try to cancel your coverage if your health becomes poor, you should look for a plan that offers A- Duration of benefits to age 65. B- A plan that provides 70-80% of your take-home pay. C- Accident and sickness coverage. D- Guaranteed renewability. E- A short elimination period.
D
Jeff and Erica have two children. they plan to purchase life insurance using this formula: (18- youngest child's age) x $10,000. which method are they using to determine their life insurance needs? A- easy method B-dual income, no kids method C- formula calculation method D-nonworking spouse method E-family need method
D
Last month some of your friends were injured in an accident. Their total injuries were as follows: -BRENDA: $85,000 -RAQUEL: $125,000 -LOUIS: $40,000 Coverage was 100/300/50. What was the total medical coverage in this accident? A- $40,000 B- $85,000 C- $125,000 D- $225,000 E- $250,000
D
Motor vehicle bodily injury coverage typically includes all of the following except A- Legal expenses. B- Bodily injury liability up to a specific level for all injured in an accident. C- Medical payments coverage. D- Bodily injury liability of all expenses, no matter the cost, for the most injured. E- Uninsured motorist's protection.
D
Of the following, which one is the most positive feature of whole life insurance for a person who wants a more structured way to save? A- You must pay interest on any loans. B- You pay premiums each year for the rest of your life. C- It is more expensive than term insurance. D- It builds cash value. E- It is permanent life insurance.
D
Barbara left a skateboard on her front steps. Her neighbor tripped on the skateboard and was injured. The skateboard was a - hazard b- negligence c- peril d- premium e- risk
a
