Ch.14

A term life insurance policy is insurance against a stated risk. usually for one year. for as long as the policyholder lives. that insures a person's life only for a stated period of time.

1 and 4 only.

Which of the following are included in the principles of sound insurance? An insured must incur loss. Indemnity must not exceed loss. The event insured against must be determinable. The event insured against must be certain.

1, 2, and 3 only.

Under the homeowner's policy, in order to receive full payment for any partial loss or damage, the homeowner must insure the house for at least how much?

80 percent of its replacement value

The social security tax is _____________ and _____________.

A payroll tax, regressive

The __________ completes the computations of risks so that the __________ can be promised by the insurance company for a __________ paid by the policyholder.

Actuary, indemnity, premium

Which of the following can be included in an automobile insurance policy? Bodily-injury liability. Property-damage liability. Medical payments. Collision. Uninsured motorists.

All of the above.

Which of the following is the person named in an insurance contract to benefit from the proceeds of the policy?

Beneficiary

Social Security is partially supported by OASI and ____ trust funds.

DI

_____________ is the oldest form of health care coverage and is perhaps the most important protection.

Disability-income insurance

Health maintenance organizations promote preventive medicine and health care; therefore, HMOs are more costly than the traditional kinds of health insurance.

False

Life insurance is essential for every family member, regardless of sex and age.

False

Most unbiased experts advise purchasing whole life insurance if life insurance is needed.

False

No-fault insurance is a type of insurance that pays the claims of the injured only if he or she is not responsible for the accident.

False

Renters insurance is a bad buy.

False

Social insurance is a form of insurance that pays the claims of the injured regardless of who is responsible for the accident.

False

The hospital/medical care coverage of the Social Security system is provided through which of the following?

Medicare/Medicaid

Which is not a type of health care coverage available from insurance companies?

Minor medical expense insurance

The law of large numbers is also referred to as which of the following?

Principle of probability

Which of the following is not a principle of sound insurance?

The law of diminishing utility

The Consumer Leasing Act does not apply to daily car rentals.

True

The four benefit programs of social security are old age, disability, survivors', and medical.

True

Universal life insurance is a life insurance policy that combines death benefits with a savings/investment program.

True

Social insurance is _____________ and private insurance is _____________.

inclusive and compulsory, selective and voluntary

In an insurance contract, the __________ agrees to pay the __________ a stated sum of money when the covered event occurs, and the __________ agrees to pay the __________ periodically for the protection against financial losses.

insurer, insured, insured, premium