chapter 8-9 insuring your life and health

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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


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