Money Study Guide 2- Final

A disadvantage of leasing

additional costs for turning the car in early

Assigned Benefits

insurance pays your doctor or hospital directly

If you sell your home without a real estate agent, you should still employ the services of a ________ to assist you with the contract and the closing

lawyer

class-action suits

legal action taken by a few individuals on behalf of a group

Liability

legal responsibility for financial cost of another person's losses or injuries

Points

prepaid interest charged by the lender each is equal to 1% of the loan amount and represents the premium you pay to obtain a lower mortgage rate

For about ________ homeowners can obtain $10,000 coverage for sewage and drain backup damage

$100 a year

Fixed Operating costs of a vehicle

- annual depreciation - automobile insurance - License plate costs

Reasons for the increase of costs in health care

- expensive technologies - duplication of tests - increasing variety of treatments - unnecessary tests -increasing elderly people

Services of a Real Estate Agent

- show you homes in areas based on needs and preapproved mortgage amount - Presenting your offer to the seller based in a market analysis - negotiating a purchase price - assisting you in obtaining financing -representing you at the closing

Private Mortgage Insurance (PMI)

-a special policy that protects the lender in case the buyer cannot make payments or cannot make them on time - usually required if the down payment is less than 20%

To qualify for disability income under social security, you must be totally disabled for _____ months or more, and you must be unable to do any work.

12

Up until what age can young people remain on their parent's insurance policy

26

A former spouse's medical plan can be continued for _______ months if the former spouse works for a company with 20 or more employees

36

Medicare

A federal program of health insurance for persons 65 years of age and older, people of any age with kidney failure, and people with certain disabilities

Rate Cap

A limit on the increases and decreases in the interest rate charged on an adjustable-rate mortgage. protects the borrower by limiting how much an adjustable-rate mortgage (ARM) product may change or adjust during any single interval.

Coordination of Benefits

A method of integrating the benefits payable under more than one health insurance plan

Strict Liability

A person is held responsible for intentional or unintentional actions

Speculative Risk

Chance of loss or gain (ex: starting a small business of gambling)

Alia Maxwell is required to pay 20 percent of her medical costs after the deductible has been paid. What is this requirement called?

Coinsurance

Because you feel young and healthy now, you may overlook the very real need for which type of insurance?

Disability income

Negligence

Failure to take ordinary or reasonable care, such as failure to supervise children in a pool

Buying Influences- Personal

Gender, age, occupation, income, education, marital status, family size

Which of the following is not a provider of health insurance?

Health Insurance Industry Association

Which health insurance policy pays benefits only when you are hospitalized, but pays these benefits in cash which you can use for medical, nonmedical, or supplementary expenses?

Hospital Indemnity

Which statement is not true about no-fault insurance systems

In recent years, all 50 states had some variation of the system

Buying Influences- Economic

Inflation, Interest rates, tax rates, government regulations, product safety

Which of the following would be an advantage of leasing a vehicle?

Lease Payments are likely to be lower than loan payments

Buying Influences- Social

Lifestyle, interests, hobbies, peer group, culture, advertising, media

LTV

Mortgage lenders may use the LTV in deciding whether to lend to you and to determine if they will require private mortgage insurance .(Loan Amount / Asset Value) * 100

As-Is Warranty

No warranty

What should be in a good health insurance plan

Offer basic coverage for hospital and doctor bills. Provide at least 120 days' hospital room/board. Provide at least $1 million lifetime maximum for each family member. Pay at least 80% out-of-hospital expenses after annual deductible of $1,000 per person or $2,000 per family. Impose no unreasonable exclusions. Limit out-of-pocket expenses to $4,000 to $6,000.

Dread Disease

Policies purchased to cover a specific disease, such as cancer or heart disease poor value

Medigap is sold or serviced by:

Private insurance companies

When comparing prices, remember that...

Ready to use products have higher prices

Julian Foster has bought a car with extra safety features, including front and side airbags and antilock brakes. How is Julian managing his risk?

Reduction

Which of the following requires large employers to provide health insurance coverage to all employees?

The Tax Cuts and Jobs Act of 2017

Peril

The cause of possible loss, such as fire, windstorms, explosions, robbery, accidents, and premature death

Vicarious Liability

When a person is held responsible for the actions of another person (ex: a parent responsible for their child harming somebody)

Actual cash value (ACV)

a claim settlement method in which the insured receives payment based on the current replacement cost of a damaged or lost item, less depreciation

Replacement Value

a claim settlement method in which the insured receives the full cost of repairing or replacing a damaged or lost item

Medicaid

a program of medical assistance to low-income individuals and families

Pure Risk

a risk that presents the chance of loss but no opportunity for gain (insuring a car)

Comprehensive major medical insurance

a type of major medical insurance that has a very low deductible and is offered without a separate basic plan

with disability income insurance, benefits usually begin...

between 30 and 90 days after the disability occurs

Exclusions and Limitations

conditions, situations, and services not covered by the insurance carrier (ex: cosmetic surgery for medical insurance)

Assigned risk pool

consists of people who are unable to obtain automobile insurance due to poor driving or accident records and must obtain coverage at high rates through a state program that requires insurance companies to accept some of them.

Which are the 'fastest' ways to increase equity in a house

conventional 15- or 20-year mortgage (lower rate than 30-year fixed)

An automobile service contract can:

cover repairs not included in the manufacturer's warranty

Open Dating

describes the freshness or shelf life of a perishable product

The waiting period in disability income is called the ____ period

elimination

Which groups have taken initiatives to contain the costs of care

employers, labor unions, health insurers, health care professionals, and consumers

Warranty of Merchantability

guarantees the product is fit for its ordinary use

Generally, disability income policies with longer periods....

have lower premiums

Which type of repair is more likely to be covered by a new homeowner service contract?

heating and air-conditioning system failure

What factors would increase the amount a person could afford to spend on a home?

income and living costs

Hazard

increases the likelihood of a loss, such as defective house wiring

Warranty of Title

indicates the seller has the right to sell the product

Most home insurance policies provide coverage for minor accidental injuries on your property under:

medical payments coverage

Escrow Account

money, usually deposited with the lending financial institution, for the payment of property taxes and homeowner's insurance

surgical expense insurance

pays part or all of the surgeon's fees for an operation

Which of the following expenses is paid from an escrow account?

property taxes

The purpose of financial responsibility laws is to:

protect the public from physical harm and property damage losses caused by drivers

Renter's Insurance

protection against financial loss due to damage or loss of personal property

Comprehensive Physical Damage

protects car from risks such as glass breakage, falling objects, vandalism, or damage caused by hitting an animal

A good health insurance plan should...

provide at least a $1 million lifetime maximum for each family member.

Disability income insurance

provides payments to replace income when an insured person is unable to work

Personal risks, property risks, and liability risks are types of ____ risk

pure

Most consumer complaints are resolved by:

returning to the original sales location

Small claims court

settles legal differences involving amounts below a set limit

The items produced for a specific retail chain of stores are commonly sold under a ______brand

store

Physician expense insurance coverage excludes which of the following

surgery

How are the majority of the people in the US covered by health insurance

their employer

Calculate Equity in a home

total assets-total liabilities

impulse buying

unplanned purchasing

Mediation

used a third party to negotiate (nonbinding)

Arbitration

uses a third party to make the decision (binding)