INSURANCE - Personal Finance

If you have a deductible of $1,000 and you damage your car that totals $6,000, how much would you have to pay out of pocket to get it fixed?

$1,000

If you have a $10 copay for prescriptions and your prescriptions for the month cost you $50, how much would you have to pay after insurance?

$10

What would be the best health insurance if you are healthy, don't take prescription meds, and only see your doctor for your annual physical?

A high deductible plan with low monthly premium

What 2 steps do insurance companies take when deciding how much to charge in monthly premiums?

Assess individual risk factor and assign higher/lower premiums

Why do insurance companies charge more if they believe you are a "high risk" customer?

Because you will likely file more claims and cost the company money

How do insurance companies make money?

Charging more on premiums than they give in insurance

What should you do before you select an insurance plan?

Check the list of doctors "in the network"

An arrangement where you are responsible for covering a percentage of covered medical expenses after you meet your deductible.

Co-insurance

3 things that describe an out-of pocket expense:

Co-pay of $15 to get a prescription, $1000 if you get in an auto accident, and excess bills for an accident

This type of auto insurance covers damages made to your car by someone without insurance.

Collision

This type of auto insurance coverage helps cover the cost of a car window replacement:

Comprehensive

What makes disability insurance different than medical insurance?

Disability insurance helps cover for lost work with 40-60% of your income

Who does Social Security usually provide insurance for?

Elderly and disabled people

TRUE OR FALSE: There are only certain times you can enroll into an insurance plan AND it takes effect immediately.

FALSE, they have certain times AND it takes time to take effect.

When setting your premium, a car insurance company may consider these three things:

How often you drive, age, and driving record

What happens if you make your monthly payments to your company's health insurance pre-tax?

It lowers the overall amount of money you are taxed each year

Because an accident/illness can happen any time and can be expensive, what does this mean in regards to an emergency fund?

It's possible your emergency fund won't be ready if you don't start saving now

5 risk factors that could lead you to pay higher health insurance premiums:

Location, age, tobacco use, plan category, and if it covers dependents or not

Can you change your insurance plan or predict an emergency?

No

If you only have liability coverage, will the insurance company cover the costs of damage to your vehicle?

No, they will only cover the damage to the other person's vehicle

This is your monthly payment to your insurer, regardless if you use their services.

Premium

What is the best alternative to cell phone insurance?

Put aside money equal to the monthly premium in a savings account

This is when insurance companies charge individuals different prices for coverage (depending on risk levels) and put everyone's money together to make payments.

Risk pooling

Life insurance coverage is a low priority for what kind of person?

Single person 1-2 years after college

Is renter's insurance a good idea?

Yes

Do different insurance companies offer different auto premiums? If so, is it best to compare companies to find the best deals?

Yes and yes

In almost every state, you are required to carry ___ ___ that covers if you cause ___ to ___ ___.

auto insurance, injury, another person