Math A credit 4
A new cell phone has a purchase price of $225. With the extended warranty, the total cost comes to $289. What percent of the purchase price is the price of the warranty? a. 28% b. 22% c. 25% d. 20%
A
A set of floor speakers costs $466. If the extended warranty on the speakers costs 32% of the price of the speakers, how much does the extended warranty cost? a. $149.12 b. $145.63 c. $107.18 d. $123.52
A
A toaster oven costing $130 offers an extended warranty for 25% of the purchase price. If the local repair shop will fix a toaster oven for $8, how many times must the toaster oven break in order for the warranty to pay for itself? a. five b. six c. four d. one
A
After reviewing her driving record for the past 3 years, Cindy's insurance company offers her a good driver discount of 4.5%. Her original policy was based on the premiums listed below. What is her new annual premium including the discount? a. $504.24 b. $523.50 c. $528.00 d. $551.76
A
Because Aaron, age 32, is a smoker, he must pay more for life insurance. Given that Company A charges 20% more for smokers, Company B charges 18% more for smokers, Company C charge 25% more for smokers and Company D charges 15% more for smokers, Aaron decides to buy his $250,000 policy from Company B. Which of the following statements is true? a. Aaron is paying the smallest premium possible with Company B. b. Aaron is paying $93 more in premiums than he would with Company A. c. Aaron is paying $129 more in premiums than he would with Company C. d. Aaron could have chosen any company because the premiums are all the same.
A
Ben just purchased a house in an older neighborhood. After talking to several neighbors across the street, he found that he is paying much more in homeowners insurance than other homeowners in the neighborhood. Ben's house is about 30 years old. It is made of wood framing and stucco texture. It has all of it's original plumbing and electrical work. The brick wall at the back of his back yard separates his yard from a drainage wash. Which of the following is not a reasonable argument for the insurance company to use to justify Ben's higher homeowners insurance premium? a. The age and outdated structural design of the house implies that remodeling is likely. This warrants a higher premium. b. Knowing that old plumbing has a tendency to break, there is a real possibility of internal flooding. This warrants a higher premium. c. Since Ben is right next to a drainage wash, there is a certain danger of flood damage should the wash overflow. This warrants a higher premium. d. Considering that the house is made of flammable materials and has the original wiring, there is a certain danger of fire. This warrants a higher premium.
A
Between permanent life insurance and term life insurance, which typically has the lower premium and why? a. Term life insurance has the lower premium because term life insurance pays the face value to your beneficiary if you die within a certain set period of time, whereas whole life insurance covers you your entire life. b. Term life insurance has the lower premium because you cannot renew the insurance after your term has ended. c. Permanent life insurance has the lower premium because you are making more premium payments (your whole life versus a set period of time), so the amount per premium payment is less. d. Permanent life insurance has the lower premium because the amount you contribute is then invested and makes interest for the life insurance company.
A
Eva is 29 years old and has 2 children, ages 3 and 5. She makes $48,500 a year. Eva decides to buy a $400,000 10-year term policy and then renew the policy for another ten years afterwards. To renew the policy the insurance company charges an extra 40% to her premium rate. Given the options below, assess whether Eva made a wise decision. a. Eva would have been better off selecting the 20-year term policy. b. Even with the extra charge for renewal, Eva's plan is the least expensive. c. Given that Eva plans to renew, she should have selected the whole life policy. d. Eva ends up paying the same amount for each policy.
A
Health insurance helps to protect you from financial loss by _____. a. paying for some or all of your medical costs while you are insured. b. working with medical care providers to minimize or discount the total cost of medical care. c. connecting you with health care representative to help keep you in good medical condition to avoid excessive medical care costs. d. informing you about lectures, classes, and presentations that help inform you about maintaining good medical condition to avoid excessive medical care costs.
A
In addition to general medical services, Holly would like to add dental and vision options to her health care plan. The monthly premium for her medical insurance is $345 of which her employer pays 65%. Her employer also offers to pay 50% of the monthly dental premium of $38 and 75% of the $23 monthly premium for the vision plan that is offered. If Holly opts for both the dental and vision options in addition to her regular health insurance, what will her total monthly premium be? a. $145.50 b. $260.50 c. $263.90 d. $406.00
A
In auto insurance, a lower deductible means the customer _____. a. has a higher monthly bill, but pays less out of pocket in the event of an accident. b. has a higher monthly bill and pays more out of pocket in the event of an accident. c. has a lower monthly bill, but pays more out of pocket in the event of an accident. d. has a lower monthly bill and pays less out of pocket in the event of an accident.
A
In order to lower his monthly auto insurance bill, Henry has decided to change his existing policy by increasing the deductible for both collision and comprehensive insurance to the highest amount permitted by his insurance company, AA Auto Insurance. His current monthly auto insurance bill, which includes a $250.00 deductible for collision and a $50.00 deductible for comprehensive, is $43.79. How will Henry's monthly auto insurance bill be affected by the change? a. $12.48 b. $31.31 c. $149.75 d. $275.75
A
In order to make premiums more affordable for their customers, Leroux Health Insurance is considering some changes to one of the plans they offer. Both the current options and proposed changes are outlined in the charts below. If Kevin is currently insured under Leroux for his medical insurance under Plan A, how will the proposed changes affect his health care costs? a. Costs for regularly scheduled health care will go down, but Kevin may end up paying more if he finds himself seriously ill or injured. b. Costs for regularly scheduled health care will go up, but Kevin will probably pay less than he would have if he finds himself seriously ill or injured. c. Both the cost for regularly scheduled health care and the cost for emergency health care will go down, making the changes very good for Kevin. d. Both the cost for regularly scheduled health care and the cost for emergency health care would go up, contradicting the intentions of Leroux Insurance.
A
Sally just purchased a beautiful home on a riverbank for what she thought was a very good deal. She later learned that her house was very susceptible to flood damage during the rainy season. Which of the following statements best describes the effect the location of Sally's new home will have on her homeowners insurance premium? a. Financial loss due to flood damage is likely. Her insurance premiums will be higher than homes not on the waterfront. b. Since floods are likely, the value of the home decreases significantly, lowering the insurance premium at the same time. c. Since floods happen so infrequently, they are not considered a real threat to the value of the home. Sally's insurance premium will not be affected. d. While extremely annoying, flood damage is usually inexpensive and will not affect the value of the home. Sally's insurance premium should not be affected.
A
Sarah, age 29, makes $45,000 a year and wants to buy a 15-year term policy that would replace seven years of her salary. The annual premium rate (per $1000 of face value) for her age group is $1.46. What is Sarah's premium, to the nearest dollar? a. $460 b. $215 c. $66 d. $986
A
Sherita, age 37, wants to pay no more than $750 a year in life insurance. If the annual life insurance premium rate (per $1000 of face value) is $3.96, what is the largest 15-year term policy she can buy without spending more than $750 annually? a. $189,000 b. $109,890 c. $203,252 d. $276,750
A
Susan is paying $0.30 per $100 on her $483,000 home in homeowners insurance annually. If her annual homeowners insurance premium is divided into twelve equal monthly installments to be included on each of her monthly mortgage payments of $2128.00, what is her total monthly payment? a. $2,248.75 b. $2,409.75 c. $3,381.00 d. $3,577.00
A
The auto insurance plans available from Fret-No-More Auto Insurance are outlined in the table below. To be considered "full" coverage, an insurance plan must include one level of coverage from each category. What is the annual premium for the cheapest insurance plan available from Fret-No-More that is considered full coverage? a. $473.16 b. $490.72 c. $715.33 d. $732.89
A
The table below lists the insurance options offered by AA Auto Insurance. Calculate the monthly payment for an insurance plan including the following options: Bodily Injury: $50/100,000 Property Damage: $100,000 Collision: $500 deductible Comprehensive: $100 deductible a. $50.04 b. $50.90 c. $54.31 d. $68.73
A
Tracy was involved in an accident in which the other driver suffered severe injuries. The police determined that the accident was Tracy's fault. Tracy is fully insured through her insurance company. Which of the following components of Tracy's insurance policy will cover the injuries of the other driver? a. bodily injury b. property damage c. collision d. comprehensive damage
A
When shopping for life insurance, you should look for: a. A company with a low premium rate and a good rating. b. A company that gives you benefits, like rewards points. c. A company with an agent that you like and trust. d. A company that has many policies to choose from.
A
Which of the following health care programs will wait to pay their share of medical coverage until after treatment is provided? a. fee-for-service plan b. health managed organization c. preferred provider organization d. point-of-service plan
A
Why are the premiums for a PPO health insurance plan generally more expensive than those for an HMO Health Insurance Plan? a. PPO insurance plans offer a wider choice of primary care doctors and specialists. b. HMO insurance plans have higher deductibles and copays. c. PPO insurance plans have higher deductibles and copays. d. HMO insurance plans require a referral for a patient to visit a specialist.
A
When might a limited warranty be a better choice than a full warranty?
A limited warranty can be more economical than a full warranty. If the conditions excluded by the limited warranty are either not very expensive or are exceedingly unlikely to ever arise, but you still want to have some protection for your purchase, a limited warranty can be a better deal.
A complete desktop computer costs $965. A replacement monitor costs $238, a replacement hard drive costs $260, a replacement outer case costs $145, labor to repair it costs $77, and shipping it to and from a repair center costs $41. A full warranty, which covers the entire cost of repairing the computer, is 35% of the purchase price. A limited warranty, which only covers internal parts and labor, costs 11% of the purchase price. If the computer tower is damaged, requiring a new hard drive, new case, labor, and shipping, which warranty will be the better deal, and by how much? a. The limited warranty will end up costing the consumer $190.60 less. b. The limited warranty will end up costing the consumer $45.60 less. c. The full warranty will end up costing the consumer $317.10 less. d. The full warranty will end up costing the consumer $192.40 less.
B
A vacuum cleaner costs $68, and the full-replacement extended warranty costs $22. If the manufacturer sells 360,920 vacuum cleaners under warranty and must replace 15% of them to honor the warranties, how much will the replacement costs be? a. $4,258,856 b. $3,681,384 c. $1,191,036 d. $6,749,204
B
After being involved in a car accident last month, Ralph's insurance company has increased his annual premium by $105.38. Approximately what change will Ralph see on his future monthly statements as a result of the change? a. Ralph's monthly insurance payment will not change. b. Ralph's monthly insurance payment will increase by $8.78. c. Ralph's monthly insurance payment will increase by $17.56. d. Ralph's monthly insurance payment will increase $105.38.
B
After getting married, Joe, 32, and Melinda, 29, decide to take out life insurance policies. Joe would like a 15-year term policy and Melinda would like a 20-year term policy. They each want a $300,000 policy. How much can Joe and Melinda expect to pay in premiums the first year? a. $2,478 b. $2,484 c. $1,488 d. $2,409
B
Allie and Sarah decided that they want to purchase renters insurance for the apartment they share. They made a list of all of the items to be covered by the insurance policy, along with their estimated values. If the items to be covered total more than $3000, the insurance company charges an annual premium of 23% of the total value of the items. If the items to be covered total $3000 or less, the insurance company charges an annual premium of 20% of the total value of the items. a. $65.00 b. $74.75 c. $325.00 d. $780.00
B
An electric guitar costs $830, with a $225 full-replacement warranty. If the manufacturer sells 532,475 warranties and has to honor 12% of them, how much profit did the manufacturer gain from the warranties? a. $105,430,050 b. $66,772,365 c. $53,034,510 d. $508,726,615
B
Gerald would like to add a dental and vision option to the health insurance plan he purchased through his employer. In addition to the 65% of Gerald's $345 monthly health insurance premium, his employer has offered to pay 50% of a $38 monthly dental premium and 75% of a $23 monthly vision premium. If Gerald adds both the dental and vision options to his insurance plan, how much will he pay each month towards health insurance? a. $141.75 b. $145.50 c. $149.50 d. $260.50
B
Greg just purchased a house for $450,000. His annual homeowners insurance premium is $0.42 per $100 of value. If his annual premium is divided into equal monthly payments, what will Greg have to pay on a monthly basis to keep his home insured? a. $1,890.00 b. $157.50 c. $1,575.00 d. $131.25
B
In an effort to reduce cost on auto insurance, Sophia has lowered each component of her current plan to the cheapest possible option. Sophia's current insurance agency is Fret-No-More Auto Insurance, whose policy options are listed below. The annual premium for Sophia's current policy is $511.31. What decrease in her annual premium will Sophia see after the change? a. $20.59 b. $38.15 c. $57.10 d. $60.88
B
In auto insurance, a higher deductible means the customer _____. a. has a higher monthly bill, but pays less out of pocket in the event of an accident. b. has a lower monthly bill, but pays more out of pocket in the event of an accident. c. has a higher monthly bill and pays more out of pocket in the event of an accident. d. has a lower monthly bill and pays less out of pocket in the event of an accident.
B
In many cases, lenders allow homeowners to included their homeowners insurance premium with their monthly mortgage payment. Tim's home is worth $279,500. If his homeowners insurance premium is $0.33 per $100, how much is added to his monthly mortgage payment for insurance? a. $7.69 b. $76.86 c. $92.35 d. $922.35
B
Jade wants to buy a $200,000 term life insurance policy. She is 34 years old. Using the premium table, what is her annual premium for a 10 year policy? a. $1,290 b. $1,202 c. $6,010 d. $820
B
Jim and Stephanie just got married and are thinking about changing their health care insurance plans to be more affordable. Currently, both Jim and Stephanie are insured through their own employers. Jim's employer pays 42% of his $378 monthly premium. His insurance plan will also pay for 23% of the $345 premium for additional beneficiaries. Stephanie's employer pays 35% of her $298 monthly premium but offers to pay an extra 10% of her premium for each beneficiary Stephanie adds to her plan. Her employer would then pay 30% of the $349 premium for each additional beneficiary. Which would be the most economical way for the couple to purchase health insurance? a. They should both add each other to their plans. b. Stephanie should add Jim to her health care plan. c. Jim should add Stephanie to his health care plan. d. They should each purchase a plan from their own employer.
B
Maria, age 28, wants to pay no more than $300 a year in life insurance. What is the face value of the largest 20-year term policy she can buy without spending more than $300 annually? a. $234,000 b. $158,000 c. $11,000 d. $567,000
B
Peter and Marcia, both age 34, can pay $650 a year each on life insurance. About how much is the face value of the largest combination of policies they can buy without spending more than a combined $1,300 annually? a. $1,945,000 b. $972,000 c. $789,000 d. $806,000
B
Renters insurance is different than homeowners insurance in that _____. a. unlike homeowner's insurance, renter's insurance will not cover items lost in a burglary. b. homeowner's insurance protects the building of residence while renter's insurance does not. c. renter's insurance only applies to apartments when homeowner's insurance only applies to houses. d. additional living expenses are covered by renter's insurance by not by homeowner's insurance.
B
Sally's employer pays for 38% of her annual health insurance premium of $4,350.00. Sally pays the remaining balance by having it deducted in equal amounts from her 26 paychecks throughout the calendar year. How much will Sally have deducted from each paycheck? a. $63.58 b. $103.73 c. $137.75 d. $207.46
B
Sarah pays $48.00 each month to keep her house insured. If her house is valued at $223,050, about how much is Sarah paying per $100 in homeowners insurance annually? a. $0.13 b. $0.26 c. $1.55 d. $3.09
B
Say you are buying a bicycle. You do not plan to use the bicycle for more than a few years before buying a new one, but will rely on it in the meantime. You know that your bicicyles tend to need repairs periodically, but you tend to take good care of them overall. The bicycle is relatively cheap, so you do not want to invest too much money into it. What kind of warranty would be a good one to purchase and why? a. full warranty b. limited warranty c. replacement warranty d. overlapping warranty
B
Stephanie has a homeowners insurance policy for her $355,000 home with an annual premium of $0.42 per $100 of value and a deductible of $500. Under this policy, in the event of a major mishap, Stephanie would have a total annual out-of-pocket expense of [($355,000 / 100) x $0.42] + $500 = $1,991 Stephanie would like to lower her premium by increasing her deductible. If Stephanie wants to increase her deductible to $1000, what annual premium would result in an annual out-of-pocket expense that is about the same as her current plan? a. $0.16 per $100 of value b. $0.28 per $100 of value c. $0.35 per $100 of value d. $0.46 per $100 of value
B
The extended warranty on a ceiling fan is 18% of the purchase price. If the price of the fan is $140, how much is the warranty? a. $7.78 b. $25.20 c. $18.72 d. $12.86
B
The health care Jimmy's employer offers is a fee-for-service plan in which Jimmy and his family must pay for $12,500 in health related services in a calendar year before the insurance company begins to pay. Jimmy and his family have several health related issues that demand $685.00 each month. If one of Jimmy's children were to become seriously injured at the end of the year, how much would the related health costs need to be in order for the insurance company to assume responsibility? a. $984.58 b. $4,280.00 c. $11,815.00 d. $14,417.92
B
The two basic types of life insurance policies are: a. Universal and Endowment b. Term and Permanent Whole Life c. General and Select d. Long Term and Short Term
B
What is the basic difference between liability insurance and collision insurance? a. Liability insurance covers only medical injuries, and collision insurance covers only property damage. b. Liability insurance covers damage that you cause, and collision insurance covers damage done to your vehicle. c. Liability insurance is optional, but most states require collision insurance. d. Liability insurance protects against theft or vandalism, and collision insurance covers against accidents or crashes.
B
What is the difference between a co-payment and co-insurance? a. Co-payment refers to two spouses paying for the same coverage, and co-insurance refers to two spouses receiving the same benefits. b. A co-payment is a flat fee for each service, and co-insurance is based on a percentage of the costs incurred. c. Co-payment is when a group of individuals work to cover each other's medical expenses, and co-insurance is when an individual has multiple insurance policies from different companies. d. A co-payment is when an employer helps an employee pay for insurance premiums, and co-insurance is when an employer helps an employee find better insurance than they could alone.
B
Which of the following statements is not something you should be thinking when considering changes in your auto insurance policy? a. Higher deductibles mean lower premiums but more out-of-pocket expense in the event of an accident. b. The premium you pay guarantees that you will never have to pay more than your deductible in the event of an accident. c. The more types of insurance you include in your policy, the more protected you are from financial loss in the event of an accident. d. Lower coverage limits mean lower premiums but more restrictions on the insurance company when covering injuries and damage resulting from an accident.
B
A lawnmower costs $284, and the six-year extended warranty on the lawnmower costs 17% as much as the lawnmower itself. What is the effective price per year of the extended warranty? a. $4.82 b. $3.93 c. $8.05 d. $7.03
C
A microwave costs $89, with a $17 full-replacement warranty. If the manufacturer sells 475,360 warranties and has to honor 7.5% of them, how much profit did the manufacturer make from the warranties? a. $3,779,112 b. $7,475,036 c. $4,908,092 d. $8,687,204
C
A space heater costing $235 offers an extended warranty for 15% of the purchase price. If the local repair shop will fix a space heater for $12, how many times must the space heater need repairs for the warranty to be worth the cost? a. one b. two c. three d. four
C
Angelo, age 40, is comparing the premium for a $125,000 whole life insurance policy he may take now and the premium for the same policy taken out at age 45. Using the table, find the difference in total premium costs over 20 years for this policy at the two age levels. a. $69,375 b. $11,725 c. $12,875 d. $644
C
As a part-time employee, Rachel does not qualify for any benefits from her current employer. Seeing a need for a health care program, Rachel went shopping for health insurance and is trying to decide between two options with a national health insurance provider. The benefits of each option are outlined in the tables below. The first option is a fee-for-service plan with a $7,500 deductible. Rachel must pay the deductible amount in health-related costs (not including co-pays) before the insurance company will contribute. This plan costs $225.00 per month and requires co-pays for most standard healthcare costs. The second option is an HMO. It is significantly more expensive at $630 per month, but has no annual deductible. The standard co-pays are also less than those in the other option. Rachel is a young lady with very few health care requirements. She anticipates one monthly visit to her primary care physician, and one annual visit to her allergy specialist. She has two generic prescription allergy medicines that need to be filled twice a month. If Rachel is able to stay healthy the entire year and does not accrue any additional health care costs, which of the following statements is true for her situation? a. The higher co-pays and annual deductible make Option 1 more expensive than Option 2. b. The higher premium for Option 2 offsets the lower co-pays making the two options the same value. c. Rachel's health care needs will cost less under Option 1 if she is able to avoid additional health care costs. d. Even though she pays more monthly, the insurance company will cover more of Rachel's health care costs under option 2.
C
Bob's employer covers 23% of his family's annual health insurance premium. The balance of the premium is deducted in equal amounts from Bob's paycheck 26 times over the calendar year. If $185.30 is withheld from each of Bob's paychecks, what is his family's annual health insurance premium? a. $805.65 b. $4,817.80 c. $6,256.88 d. $20,946.96
C
Cindy's apartment complex is offering renters insurance through their insurance company. The insurance company charges an annual premium of $565.00 which can be paid in equal payments throughout the year with her monthly rent. Cindy's monthly rent is currently $789.00. What will Cindy's new rent be if she includes the renters insurance? a. $47.08 b. $630.75 c. $836.08 d. $1,354.00
C
DeShawn is 38 years old and is married with 3 children, ages 2, 4, and 6. He makes $45,000 a year and is planning to retire when he turns 60. From the following three options, DeShawn decides to buy the $900,000 20 year term policy. Given DeShawn's scenario, assess whether DeShawn made a wise decision. a. DeShawn would be safer buying whole life policy. b. DeShawn would have more money in the long run if he invested in the 20-year endowment. c. DeShawn's current policy will cover his family for an adequate period of time at his current salary. d. DeShawn's current policy has too high of a face value and does not cover his family long enough.
C
Determine what Paul will have to pay on an annual bases for his $449,000 home if his insurance company is charging him $0.41 per $100 of value in his home. a. $153.41 b. $220.76 c. $1,840.90 d. $2,649.10
C
If Yessenia wants to buy a $165,000 whole life policy, and the annual premium rate (per $1000 of face value) for her age group is $15.46, how much is Yessenia's monthly premium? a. $1,067.27 b. $2,550.90 c. $212.57 d. $171.33
C
If an item tends to be very expensive to repair, how might that affect your decision to purchase a warranty for it? a. If an item is very expensive to repair, it is probably easier to buy a new one than to repair it, so a warranty is probably not worth it. b. The price of a warranty is based on the price of the repairs, so a warranty might not be a good idea. c. Buying an extended warranty might be a good idea so that you do not have to repair the item yourself. d. Buying a limited warranty might be a good idea because limited warranties sometimes do not deal with repairs, meaning that you will not have to handle these expensive repairs.
C
Jacob wants to buy a $500,000 15-year term life policy, and the annual premium rate (per $1000 of face value) for his age group is $6.78. If Jacob lives until the end of the term of his policy, how much will Jacob have paid in premiums overall? a. $101,700 b. $3,390 c. $50,850 d. $73,746
C
Javier's employer pays for 43% of his annual health insurance premium. Javier pays the remaining balance by having it deducted from his paychecks in equal amounts twice a month throughout the year. If $157.38 is deducted from each of Javier's paychecks, what is his total annual premium? a. $3,313.26 b. $4,392.00 c. $6,626.53 d. $8,784.00
C
Jennifer purchased a house in a brand new development in the outskirts of town. When her house was built, the nearest fire department was nearly 20 miles away. As her neighborhood developed, the density of the community called for a new fire department 1.5 miles away. What effect will the new fire station have on her homeowners insurance premium? a. A new fire department will be more demanding on local taxes. Her annual premium will go up. b. The location of a fire department has no bearing on the value of her house. Her annual premium will stay the same. c. The new fire department will reduce the risk of financial loss in her home. Her annual premium should decrease. d. With a fire department so close (less than 5 miles), financial risk on Jennifer's home practically disappears. She will not need to pay insurance anymore.
C
Jerry is currently insured through AA Auto Insurance, but would like to lower his auto insurance premium by at least $10 per month. His current insurance plan includes the $50/100,000 limit for bodily injury, $100,000 limit for property damage, a $250 deductible for collision, and a $50 deductible for comprehensive. Which of the following adjustments would allow Jerry to meet his goal? a. Reduce bodily injury limits to $25/50,000. b. Reduce property damage to $25,000. c. Increase collision deductible to $500. d. Increase comprehensive deductible to $100.
C
Leroux Health Insurance is considering changing the options in one of their health care plans (Plan A) based on customer feedback that prescriptions and regular visits to the doctor are too expensive for the insured individual. How can Leroux reduce the costs of regular health care without driving up the price of their health care plan? a. Reduce the monthly premium but increase the co-pay amounts to compensate for the lower premium. b. Reduce the annual deductible, but increase the co-pay amounts so that the monthly premium can stay the same. c. Reduce the co-pay amounts but increase the annual deductible so that the monthly premium can stay the same. d. Reduce the co-pay amounts but increase the monthly premium to compensate for the lower deductible.
C
Mr. Henderson's annual premium of $4,668 is covered entirely by his employer along with 25% of the $9,264 premium for his wife and kids. How much of the Henderson family's annual premium is being paid for by Mr. Henderson's employer? a. $2,316 b. $3,483 c. $6,984 d. $10,431
C
Of the following, which factor or factors would make it more likely that buying an extended warranty is a good idea? I. The extended warranty overlaps with the manufacturer's warranty. II. The product has a high probability of needing repair in the next few years. III. The product is a major purchase that you are unlikely to soon replace. a. I and III b. II only c. II and III d. I, II, and III
C
Patrick and Susie just welcomed a set of twins to their family and have to decide how to purchase health insurance for the babies. Patrick's employer pays for 100% of his monthly health insurance premium of $378, but will not pay for any of the $280 for each additional beneficiary. Susie's employer, who pays 63% of her $403 monthly premium, offers to pay 32% of the $310 monthly premium for each additional beneficiary. Which would be the most economical way to purchase health insurance for the family? a. Insure the entire family (Patrick, Susie, and the twins) with Patrick's employer. b. Insure the entire family (Patrick, Susie, and the twins) with Susie's employer. c. Insure Patrick with his employer and Susie and the twins with her employer. d. Insure Susie with her employer and Patrick and the twins with his insurer.
C
Sam knows that his annual homeowners insurance premium is $0.27 per $100 of value, which usually works out to be $683.10 annually. But Sam is confused by a letter from his insurance company telling him that an increase in the value of his home has led to an increase in his annual homeowners insurance premium. He is now being charged an annual premium of $720.90. Based on the increase in his annual homeowners insurance premium, what was the increase in his home's value? (Note: The cost is still $0.27 per $100, even though the annual premium went up.) a. $140 b. $1,400 c. $14,000 d. $140,000
C
Say you have a warranty on your laptop computer. Which of these situations is most likely to be covered by that warranty? a. The laptop is stolen. b. You short out the hard drive by installing a bigger power supply. c. The graphics system fails due to faulty wiring. d. The screen cracks when you drop the laptop.
C
Susie is thinking about changing her auto insurance policy at Fret-No-More Auto Insurance. Her current policy includes the following options: $50/100,000 limit for bodily injury, $25,000 limit for property damage, $250 deductible for collision, and $50 deductible for comprehensive. Which of the following changes would increase Susie's limits the most without increasing her monthly premium by more than $5.00? a. Increase coverage on bodily injury to $100/300,000. b. Increase coverage on property damage to $50,000. c. Increase coverage on bodily injury to $100/300,000 and on property damage to $50,000. d. Increase coverage on bodily injury to $100/300,000 and on property damage to $100,000.
C
Tara and Levi are trying to decide between homeowners insurance policies offered by two different agencies. AAA Insurance has offered to insure their home for an annual premium of $0.38 per $100 with a $500 deductible. Thompson's Insurance has offered to insure the same home for an annual premium of $0.26 per $100 with an deductible of $1,000. The house Tara and Levi purchased is valued at $425,000. Which of the following statements accurately describes the difference between the two plans? a. AAA Insurance is cheapest if Tara and Levi experience an incident that results in severe damage or loss to their home. b. AAA Insurance would be cheapest if Tara and Levi can avoid any incidents that result in severe damage or loss to their home. c. Thompson's Insurance is cheaper even if Tara and Levi experience an incident that results in severe damage or loss to their home. d. Thompson's will be more expensive whether or not Tara and Levi experience an incident that results in severe damage or loss to their home.
C
The extended warranty on a mini-fridge costs $41.25. If the warranty is 12.5% of the normal price, what is the cost of the mini-fridge itself, to the nearest dollar? a. $225 b. $516 c. $330 d. $303
C
Tom is considering making changes to his policy to make insurance more affordable. Which of the following statements is not something Tom should consider when making changes to his policy? a. Increasing the deductible on collision insurance will reduce his overall monthly and annual expense, but will lead to more out-of-pocket expense if he is in a collision. b. Removing comprehensive insurance will reduce his overall expense, but will leave Tom entirely responsible for the cost of a new windshield if he hits a rock on the highway. c. Increasing the limits on his bodily injury insurance will reduce his overall expense by putting greater limits on how much the insurance company will pay for injuries. d. Removing property damage insurance will reduce his overall expense, but will leave Tom responsible for the cost of repairs to any other cars involved with Tom in a collision.
C
When shopping for life insurance, the best strategy is to: a. Follow your agent's recommendations. They are the experts and it is the agent's job to make sure you get the products that are right for you. b. Buy your coverage through your employer, if possible. c. Figure out how much you need, then comparison shop using the Web and other resources. d. Wait until you are older so that you can buy a cheaper, shorter term policy.
C
Which of the following is a cost homeowners insurance does not protect? a. The cost of repair or replacement of a home lost in a natural disaster. b. Additional living expenses required while your home is repaired after a disaster. c. Replacement costs for all contents in your home, including high cost electronics. d. The cost of medical expenses incurred by somebody getting injured on your property.
C
Which of the following is something that will not affect your homeowners insurance premium? a. the age of the home b. the size of the home c. the color of the home d. the location of the home
C
You're 35 years old now, and you want to purchase life insurance which will cover your spouse for your lost income in the event of your death. You want this policy to last until what would be your normal retirement age of 65. Based on the given information, what is the best policy to buy? a. 10-year term policy b. 20-year term policy c. 30-year term policy d. Whole life policy
C
The annual insurance premium for a car Nicole bought 6 months ago is $756.00 with a $500 deductible for collision. Nicole had just paid the bill for her sixth month of insurance before she was involved in a car accident resulting in $2,000 in damage to her car. Because she had collision insurance in her policy, the insurance company took care of all of the repairs less the $500.00 deductible. Considering how much she paid in insurance premiums and deductibles, would you say the purchase of insurance over the last 6 months was a good investment for Nicole? Why or why not?
Combining the 6 months of insurance payments ($63.00 per month for 6 months = $378.00) with the $500 deductible, Nicole paid a total of $878.00 for the $2,000 worth of repairs to her car. This was a good investment.
Andrew is insured by Leroux Health Insurance under Plan A. The plan includes a $248.00 monthly premium with a $5,500.00 annual deductible (not including co-pays). Andrew is severely asthmatic. He visits his primary care physician twice a month and his asthma specialist once a month. He has two separate generic inhalers that need to be refilled on a weekly basis. To make matters worse, Andrew has recently been diagnosed with appendicitis and is scheduled to have his appendix removed in the morning. The procedure will cost about $1,500. Considering his frequent doctor visits, many prescription refills, and his appendix removal in addition to his monthly premium, how much will Andrew pay in health care related fees this year? a. $2,976.00 b. $5,500.00 c. $6,216.00 d. $7,716.00
D
Because of an accident Royce was involved in, his insurance company has increased his annual premium for auto insurance by 5.2%. His original policy was set up using the premiums listed below. What is his new annual premium after the increase for the accident? a. $514.76 b. $543.00 c. $548.20 d. $571.24
D
Billy's employer pays for 65% of his annual health insurance premium. Billy has the rest deducted in equal amounts from his paycheck. If Billy has $105.73 withheld from his paychecks twice each month, how much does his employer contribute towards his health insurance on an annual basis? a. $683.18 b. $1,366.36 c. $2,356.27 d. $4,712.54
D
For the past 16 months, Susie has been paying $126.50 each month to her insurance company. After causing an accident last month, her insurance company notified her that her monthly payment will be increased by $21.25. What increase in her annual premium did Susie's insurance company apply as a result of the accident? a. $21.25 b. $125.60 c. $147.75 d. $255.00
D
Jeremy is 29 years old and in good health. What is the annual premium for the cheapest policy having a $90,000 face value that Jeremy can buy? a. $1,825 b. $1,294 c. $1,929 d. $1,643
D
Jordy was living in a third story apartment in his complex. Up there he was paying an annual renters insurance premium of $325.00. When an opportunity to move to the ground floor came up, he jumped on it, but found out that, since burglaries are more common on ground floor apartments, his renters insurance premium would go up by 18%. What is his new annual renter's insurance premium. a. $58.50 b. $31.96 c. $268.96 d. $383.50
D
Kurtis had purchased a renters insurance policy for his new apartment at an annual premium of $588.00. The items covered in the policy included a bicycle kept locked to the railing in front of the apartment. When the bicycle was stolen, the insurance company covered the replacement cost of the bicycle, but told Kurtis that, because of the loss, his premium would increase by 35% if he wished to continue with the policy. What would Kurtis' new annual premium be if he chose to keep the policy. a. $36.75 b. $66.15 c. $441.00 d. $793.80
D
Lamar, age 43, wants to pay no more than $1,000 a year in life insurance. If the annual life insurance premium rate (per $1000 of face value) is $12.59, what is the largest whole life policy he can buy without spending more than $1,000 annually? a. $12,590 b. $341,540 c. $541,370 d. $79,000
D
Most U.S. workers and their families receive their health care plan through their employer because _____? a. insurance costs are guaranteed to be cheapest by going through their employer. b. employees are required by federal law to purchase health care through their employer. c. employers are required by federal law to provide health care options for their employees. d. group coverage is usually cheaper than individual coverage which allows employers to offer better benefits for less money.
D
Ned's truck was caught in a hailstorm that left his truck body damaged and his paint job ruined. Ned is fully insured through his insurance company. Which of the following components of Ned's insurance policy will take care of the damage done to Ned's truck during the hailstorm? a. bodily injury b. property damage c. collision d. comprehensive damage
D
Ralph wants to purchase a renters insurance policy for his new apartment. His insurance company charges an annual premium of 16.53% of the approximate value of the items he owns and is keeping in his apartment. Below is a list of items Ralph made of the items he has in his apartment that he would like to be insured with his policy. What will Ralph's annual renters insurance premium be? a. $17.88 b. $35.48 c. $214.58 d. $425.65
D
The extended warranty on a garage door is $238. If the warranty costs 35% of the purchase price, how much does the garage door itself cost, to the nearest dollar? a. $833 b. $393 c. $740 d. $680
D
What is the difference between a full warranty and a limited warranty? a. A full warranty is a guarantee to replace a faulty product, while a limited warranty is a guarantee to repair a faulty product. b. A full warranty will pay for repairs any number of times that the product breaks, but a limited warranty will only pay a certain number of times. c. A limited warranty is only good for a certain length of time, but a full warranty is good forever. d. A full warranty will cover any repairs or replacement that the product needs, while a limited warranty will only pay for certain repairs.
D
Which of the following acronyms does not represent a managed care plan? a. HMO b. PPO c. POS d. SOR
D
Which of the following is not a reason young drivers have higher auto insurance premiums than older drivers? a. A very high percentage of teen deaths have been the result of motor vehicle crashes. b. A very high percentage of teenage drivers have had an accident in the first year of receiving a license. c. Accidents involving teenage drivers have resulted in billions of dollars of medical expenses and property damage in recent years. d. Accidents involving teenage drivers have required additional investigation, the cost of which is passed on to the driver in the form of a higher premium.
D
Which of the following will not help Robert lower his homeowners insurance premium? a. Increase the deductible on his policy. b. Remove replacement cost from his policy. c. Reduce the number of riders on his policy. d. Increase the total coverage of his home on his policy.
D
James is looking into life insurance. He currently makes $50,000 a year and has two children, ages 15 and 11. How much coverage and how long a term of life insurance would you recommend to James?
If James wants to cover both of his children at his current salary until they both can support themselves on their own, he would need a 10-year term policy (if the youngest moves out when he/she is 21) with a face value of $500,000 (current salary-$50,000*10 years).
What kind of warranty is often offered not through the manufacturer but instead through a third party? a. manufacturer's warranty b. extended warranty c. full warranty d. limited warranty
NOT ; A
Auto insurance options offered by AA Auto Insurance are outlined in the table below. What monthly payment would you expect for an insurance policy through AA Auto Insurance with the following options? Bodily Injury: $25/50,000 Property Damage: $25,000 Collision: $250 deductible Comprehensive: $100 deductible a. $43.23 b. $46.10 c. $54.85 d. $64.44
NOT ; B
When considering whether or not to buy an extended warranty for a large purchase, what are some factors that you should consider?
The durations and coverage of the manufacturer's warranty, as well as whether or not the extended warranty overlaps with it, should be taken into consideration. The likelihood of the item needing repairs, as well as the cost of repairing it, should also be considered. Furthermore, it is helpful to consider the cost of the warranty, its relation to the cost of the item, and whether it is a full or limited warranty.
