Personal Finance: Chapter 6 Review
true
A major advantage to HMOs is their focus on preventive care and wellness.
liability
A type of coverage that protects if someone is injured on your property or due to your actions
false
All risks are avoidable.
false
All risks have serious potential losses and should be managed with risk avoidance or risk transfer.
premium goes up but benefit stays the same
As you age, renewable term life...
false
Driving without a spare tire will usually lead to serious personal risk.
risk reduction
Finding ways to lower your chance of loss is...
replacement cost
For insurance purposes, what you would pay today to replace an item is the
your employer
Group life insurance is offered through...
true
Having a home security alarm system can reduce your insurance premium.
primary care physician
Health Maintenance Organizations (HMOs) require that you choose one doctor to be...
gone up
Health insurance premiums and deductibles have done what over the past several years...
false
High-risk pools offer maximum insurance coverage at high cost to poor drivers.
false
Homeowner's insurance protects a homeowner from fire damage but does not include liability coverage.
false
If you have health insurance, you do not have to worry about the costs of health care.
level term
In which type of term insurance policy will the death benefit remain the same?
true
Insurance agencies can save you money by comparing several companies to find the best deal
personal risk
Losing your leg is what type of risk?
government sponsored health care
Medicare and Medicaid are examples of...
avoiding risk
Not going skydiving is what type of risk strategy
Risk Avoidance
Not participating in a dangerous activity is...
risk assumption
Self-insuring is a form of...
risk avoidance
Stopping behavior that leads to a risk is known as...
the entire financial market
Systemic risk affects...
short term disability insurance
Temporary coverage for nonwork-related illness or injury is covered by...
false
Term insurance is an important part of your permanent life insurance plan.
deductible
The amount of money you must pay before insurance kicks in is called...
health savings account
These accounts allow you to save pre-tax money for health care expenses
major medical
This coverage protects against very serious injury or illness
short-term disability
What insurance protects you if you cannot work due to injury or illness for up to 2 years?
house
What is real property?
comprehensive
What type of coverage will cover your car if it has hail damage?
collision
What type of coverage will cover your car if it is damaged in a wreck or roll over?
permanent life
What type of life insurance gains cash value?
stop-loss
When your insurance policy allows for a maximum out-of-pocket amount, it is known as...
free-for-service
Which of the following is considered unmanaged care?
term insurance
Which of the following is known as pure insurance?
liability coverage
Which of the following type of coverage would pay for injuries to guests in your home?
basic health care
Which of the following type of health insurance plan includes coverage for medical, hospital, and surgery expenses?
umbrella
Which type of coverage gives protection above your normal liability coverage?
true
You can reduce your insurance premium cost by paying annually instead of monthly.
combining coverage, comparison shopping, increasing your deductible
You can reduce your insurance premiums by...
false
You should assume the risk for large expenses and get insurance to cover small and routine costs.
stop-loss provision
a clause that provides 100 percent coverage of medical expenses after a certain amount has been paid by the insured
home inventory
a list of items of value in your home
loss
a physical injury, damage to property, or disappearance of property
health insurance
a plan for sharing the risk of medical costs
Renters Insurance
a tenant's policy that protects against the loss of personal property in a rented residence
risk transfer
buying insurance to shift the risk of financial loss to an insurance company
risk reduction
finding ways to lower your chance of incurring a loss
liability coverage
insurance protection against injuries suffered by others on your property or as a result of your actions
life insurance
insurance that pays money to the beneficiary upon the death of the insured person
automobile insurance
insurance that protects a car owner from losses as a result of accidents and other events
Homeowners Insurance
insurance that protects against risk of loss to a home and its contents
permanent life insurance
insurance that provides a death benefit and builds cash value
disability insurance
insurance that provides income to replace a portion of normal earnings when the insured is unable to work due to nonwork-related injury or illness
umbrella policy
liability coverage above that of your homeowner's and car insurance
self-insure
setting aside money to be used in the event of injury or loss
term life insurance
temporary insurance that pays only a death benefit
risk
the chance of injury, damage, or economic loss
Probability
the likelihood of a risk resulting in a loss
beneficiary
the person designated to receive money from a life insurance policy
premium
the price paid for insurance coverage
risk assessment
the process of identifying risks and deciding how serious they are
