chapter 6

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

False

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

False

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

False

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

False

Which of the following is considered unmanaged care?

Fee-for-service

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

True

Insurance that protects a car owner from losses as a result of accidents and other events.

automobile insurance

Which of the following type of health insurance plan includes coverage for medical, hospital, and surgery expenses?

basic health care

The person designated to receive money from a life insurance policy.

beneficiary

Insurance that provides income to replace a portion of normal earnings when the insured is unable to work due to non work-related injury or illness

disability insurance

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

false

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

false

A plan for sharing the risk of medical costs

health insurance

A list of items of value in your home.

home inventory

Insurance that protects against risk of loss to a home and its contents.

homeowner's insurance

Insurance protection against injuries suffered by others on your property or as a result of your actions.

liability coverage

Insurance that pays money to the beneficiary upon the death of the insured person

life insurance

A physical injury, damage to property, or disappearance of property.

loss

Insurance that provides a death benefit and builds cash value.

permanent life insurance

The price paid for insurance coverage

premium

The likelihood of a risk resulting in a loss.

probability

A tenant's policy that protects against the loss of personal property in a rented residence.

renter's insurance

For insurance purposes, what you would pay today to replace an item is the

replacement cost

The chance of injury, damage, or economic loss

risk

The process of identifying risks and deciding how serious they are

risk assessment

Self-insuring is a form of

risk assumption

Not participating in a dangerous activity is

risk avoidance

Finding ways to lower your chance of loss is

risk reduction

Buying insurance to shift the risk of financial loss.

risk transfer

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

self-insure

Temporary coverage for non work-related illness or injury is covered by

short-term disability insurance

A clause that provides 100 percent coverage of medical expenses after a certain amount has been paid.

stop-loss provision

Which of the following is known as pure insurance?

term insurance

Temporary insurance that pays only a death benefit.

term life insurance

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

true

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

ture

Liability coverage above that of homeowner's and car insurance.

umbrella policy