PFP 360 Exam 2 Assignment 6

Randy has an automobile insurance policy with the following split limits: 100/300/10. What is the most that will be paid to one person in an accident if Randy is found liable for that person's bodily injuries?

$100,000

Sammy will earn a gross salary of $135,000 in 2017. How much will he have deducted from his gross salary to pay FICA taxes?

$127,000 x .062% = $7,886.40 $135,000 x .0145% = $1,957.50 $7,886.40 + $1,957.50 = $9,843.90

Vada, a fully insured worker begins receiving retirement benefits 11 months before her full retirement age. Her monthly retirement benefit will be reduced by 11/180ths (approximately 6.11%). If Vada's monthly retirement benefit at full retirement age (FRA) were $1,000, she would receive $938 per month for the remainder of her life, subject to COLA adjustments.

(11/180) x $1,000 = $61.11 $1,000 - $61.11 = $938.99

Which of the following statements, concerning property insurance, is/are true? 1. Property insurance policies fall into two broad categories with respect to covered perils - named-perils policies and open-perils policies ("all risk"). 2. Named-perils policies provide broader and more comprehensive coverage than open-perils policies ("all risk").

1

Which of the following statements, concerning an HO-3 homeowner's insurance policy, is/are true? 1. An HO-3 policy provides coverage on the dwelling. 2. An HO-3 policy provides broad named-perils coverage on other structures. 3. An HO-3 policy provides broad named-perils coverage on personal property. 4. An HO-3 policy provides basic named-perils coverage for loss of use.

1 and 3

Which of the following statements, concerning Medicare Parts A and B, is/are true? 1. Medicare Part A provides some coverage for hospital care, skilled nursing facility care, home health care, and hospice care. 2. Medicare Part B provides some coverage for doctor's services. 3. Most covered individuals pay a premium for Medicare Part A. 4. Most covered individuals pay a premium for Medicare Part B. 5. Medicare Parts A and B are available to most people over age 65.

1, 2, 4, and 5

Which of the following is/are taken into consideration to arrive at a taxpayer's modified adjusted gross income for the purpose of determining the percentage of Social Security benefits subject to taxation? 1. Foreign earned income exclusion 2. Tax-exempt interest income 3. Adjusted gross income from all sources other than Social Security 4. 100% of Social Security benefits

1, 2, and 3

Which of the following statements, concerning Medicare characteristics, is/are true? 1. Medicare Part A has a deductible. 2. Medicare Part B has a deductible. 3. Medicare Part A is financed through FICA taxes. 4. Medicare Part B is financed through FICA taxes.

1, 2, and 3

Which of the following statements, concerning Social Security retirement benefits, is/are true? 1. To qualify for retirement benefits, a worker must be "fully insured", which means the worker has earned a certain number of quarters of coverage under the Social Security system. 2. The designated amount for a quarter of coverage is $1,300 for 2017. 3. Workers, who earn at least $5,200 in 2017, will be credited with four quarters of coverage. 4. 30 quarters of coverage will "fully insure" a worker for life.

1, 2, and 3

John, a fully insured worker, is considering taking his Social Sercuity retirement benefits at 63 years and 6 months. His full retirement age is 65 years and 6 months. If John begins taking his benefits at full retirement age, his monthly retirement benefits will be $1,000. What will John's monthly retirement benefits reduce to if he begins taking them at 63 years and 6 months.

24/180 x $1,000 = $133.33 $1,000 - $133.33 = $866.67

Section II of the homeowner's policy is designed to provide coverage for which of the following? 1. The dwelling 2. Loss of use 3. Personal liability 4. Medical payments to others

3 and 4

_____ coverage protects the insured's auto against perils out of the insured's control such as missiles or falling objects, fire, theft, earthquake, hail, flood, and vandalism.

Comprehensive coverage

Personal Umbrella Liability Policy

Coverage designed to provide a catastrophic layer of liability coverage on top of the individual's homeowners and automobile insurance policies.

Open-Perils Policy ("All Risk")

Designed to protect against all perils except those specifically excluded from coverage. This increased coverage results in a higher premium for the insured.

A tenant, who needs personal liability coverage plus contents coverage and loss of use coverage, is likely to purchase an ____ homeowner's insurance policy.

HO-4

Medicare Part A

Hospital insurance is paid for by a portion of the Social Security tax. Part A helps pay for necessary medical care and services furnished by Medicare-certified hospitals, inpatient hospital care, skilled nursing care, home health care, hospice care, and other services. The number of days that Medicare covers care in hospitals and skilled nursing facilities is measured by the benefit period. A benefit period beings on the first day a patient receives services as a patient in a hospital or skilled nursing facility and ends after the patient has been released for 60 consecutive days. There is no limit to the number of benefit periods a beneficiary may have.

Part A Personal Auto Policy

In the PAP's liability coverage section, the insurance company agrees to pay damages caused by an accident, up to the policy limit, for which the insured is legally responsible. The insurer retains the right to defend or settle any claim or suit, and settlement and defense costs are paid in addition to the policy limits. An insured is defined as the following: 1. You or any family member, for the ownership, maintenance, or use of any auto or trailer (this includes the use of borrowed autos and even rental cars) 2. Any person using your covered auto with permission or belief of right to use 3. Any organization that is responsible for the conduct of someone driving your covered auto (an employer or charitable organization) 4. Any organization that is responsible for your conduct or the conduct of a family member while you are driving a nonowned automobile

Coverage D of the Homeowner's Policy

Loss of use coverage may provide reimbursement to an insured homeowner for additional living expenses or loss of fair rental value.

Part B Personal Auto Policy

Medical payments are optional no-fault, first-party coverage designed to pay for bodily injuries sustained in an auto accident. Expenses must be incurred within three years of the auto accident. Limits of insurance are provided on a per-person, per-occurrence basis. An insured in this coverage is defined as any of the following: 1. You or any family member while occupying a motor vehicle. 2. You or any family member as a pedestrian when struck by a motor vehicle. 3. Any other person while occupying your covered auto.

______ is optional, no-fault, first-party insurance coverage designed to pay for bodily injuries sustained in an auto accident.

Medical payments coverage

Part C Personal Auto Policy

Offers insureds the option of purchasing uninsured motorist coverage that covers damages caused by an uninsured or underinsured motorists because so many drivers do not obey financial responsibility and compulsory automobile insurance laws. An insured is defined as follows: 1. You or any family member 2. Any other person occupying your covered auto 3. Any person who might also be entitled to damages (spouse or child) for the injuries sustained by a person described above

Medicare Part B

Pays for 80% of approved charges for most covered services. Unless an individual declines Part ____ medical insurance protection, the premium will automatically be deducted from her Social Security check. Usually does not cover charges for routine physical examinations or services unrelated to the treatment of injury or illness. Dental care, dentures, cosmetic surgery, hearing aids, and eye examinations are not covered by Part ___. Covers a limited number of outpatient prescription drugs that are not typically self-administered and that are provided in a hospital outpatient department or doctor's office.

Coverage F of the Homeowner's Policy

Pays necessary medical expenses of others that result from bodily injury. Bodily injuries must arise out of the insured's activities, premises, or animal(s) on or off the insured's property.

Named-Perils Policy

Protects from perils that are specifically listed in the policy.

Coverage E of the Homeowner's Policy

Protects the insured homeowner and all resident family members against liability for bodily injury and property damage that may occur on or off the insured's premises due to negligence.

Coverage C of the Homeowner's Policy

Provides coverage for personal property, referring to belongings possessed by the policy owner as well as the personal property of any resident family members. Includes furniture, clothing, electronics, and other personally owned possessions, regardless of where the property is located at the time of loss.

Coverage A of the Homeowner's Policy

Provides coverage for repair or replacement of damage to a dwelling, a residential structure covered under a homeowners policy. Also covers attached structures and building materials on the premises.

Coverage B of the Homeowner's Policy

Provides coverage for small, detached structures on the dwelling property. Includes detached garages, small greenhouses, storage buildings, and gazebos. *Typically 10% of the Coverage A limit

Part D Personal Auto Policy *Study the characteristics of Part D

Provides the insured with two different direct damage coverages: collision and comprehensive. The insured may purchase one, both, or neither of these coverages. Automobile lenders will generally require the insured to carry both coverages. Collision: the upset of your covered auto or its impact with another vehicle or object Comprehensive: protects the insured against the following perils: missiles or falling objects, fire, theft, explosion, earthquake, windstorm, hail, water or flood, malicious mischief or vandalism, riot or civil commotion, contact with a bird or animal, and breakage of glass.