CSR 103 Purdue University Exam 3

A disadvantage of home ownership is the deductibility of mortgage interest and real estate tax payments.

False

A landlord has the right to sublet an apartment.

False

Another name for homeowner's insurance policy is an umbrella policy.

False

As interest rates increase, more people are able to afford the cost of an average-priced home.

False

Blue Cross and Blue Shield are two types of HMOs.

False

Caroline was found liable in an accident. This is usually not due to negligence on her part.

False

Health Care costs have decreased because of aging baby boomers using fewer health care services.

False

Long-term care insurance is used to pay for a stay in a nursing home but not for help at home.

False

Private mortgage insurance is usually required if the down payment for a home is less than 30%.

False

Rental insurance isn't important since the landlord's insurance on the building includes coverage on all tenants' belongings.

False

The financial problems caused by death are greater than those caused by disability.

False

Your decision to rent or to buy your residence should be based solely on lifestyle factors.

False

The type of health insurance coverage that takes up where basic health insurance coverage leaves off is

Major medical expense

The opportunity to have another person take over rent payments and live in the rental unit is called (a)

Subletting

Which of the following is a disadvantage of renting?

Tenants cannot take tax deductions for mortgage interest and property taxes

The primary benefit of a home equity loan is

The deductibility of the loan interest on federal taxes

Liability is defined as

The legal responsibility for the financial cost of another person's losses or injuries

Which of the following is TRUE about the long-term care insurance?

The older you are when you enroll, the higher the premium

Kelly selected a home and submitted an offer to the seller.

The seller may reject the offer and choose to provide a counteroffer

Most people receive health insurance under a group plan from

Their employer

What is a typical copayment amount for individuals?

$20-30

All of the following are acceptable types of documentation for a household inventory except

A listing of items and their details in your memory

The most common risks are A. Personal risks. B. Property risks. C. Liability risks. D. All of these are common risks. E. None of these are common risks.

All of these are common risks

Which of the following questions should one ask when developing a risk management plan? A. What do I need to insure? B. How much should I insure something for? C. What kind of insurance should I buy? D. Whom should I buy insurance from? E. All of these questions should be asked when developing a risk management plan.

All of these questions should be asked when developing a risk management plan

What should a homebuyer consider when evaluating a house? A. Zoning laws. B. Location of business and future construction projects. C. School system. D. Property values of the community. E. All of these should be evaluated.

All of these should be evaluated

When Nancy buys her house, the mortgage company will usually conduct a(n)

Appraisal

Nancy is studying the health insurance plan options offered by her employer. She wants a policy that will have the insurance pay a percentage of her medical expenses after she meets her deductible. She should review the

Coinsurance

Jenny wants health insurance that sets the amount that she must pay toward medical expenses before the insurance starts paying benefits. She is concerned about a

Deductible

Frank and Diane want to buy a house. Which of the following do they need before they purchase a home?

Down payment

Which of the following expenses is NOT usually incurred by a tenant?

Property Taxes

Steve's employer offers a health plan that stresses preventive services and covers routine immunizations and checkups, screening programs, and diagnostic tests. What kind of plan does his employer offer?

Health maintenance organization (HMO)

When Sam applied for a loan, he was assured that his rate would not change if he closed within 30 to 90 days. Sam had a(n)___________ on the interest rate.

Lock

What is the primary purpose of medical expense insurance?

Pay actual medical costs for illness or injury

Anything that may possibly cause a loss is called a

Peril

What is the fee that a policyholder pays when an insurance company agrees to take on the risk?

Premium

Which of the following is NOT correct? A. Renting is usually less costly in the short run. B. Home ownership usually has long-term financial advantages. C. Lifestyle and financial factors should be analyzed to determine if you should rent or buy. D. Traditional financial guidelines suggest that your home should cost about five times your annual income. E. Renting offers mobility.

Traditional financial guidelines suggest that your home should cost about five times your annual income.

A Medicare Advantage Plan (Part C) combines your Part A (Hospital) and Part B (Medical) coverage into one plan.

True

A brick home will usually cost less to insure than a similar structure made of wood.

True

A deductible is a set amount you must pay toward medical expenses before the insurance company pays benefits.

True

A homeowner's insurance policy provides coverage for additional living expenses so you can stay somewhere else if a fire damages your home.

True

A real estate agent can help screen potential buyers to determine whether they will qualify for a mortgage.

True

An insurance claim is a request for payment to cover financial losses.

True

Every state in the United States has a law requiring people to carry motor vehicle insurance.

True

Lenny the landlord has the right to take legal action against Tina the tenant for nonpayment of rent or destruction of property.

True

Renter's insurance protects the tenant by covering damage or theft to clothing, furniture, and stereo equipment.

True

Risk management is an organized plan for protecting yourself, your family, and your property.

True

Robby fell on some ice on Peter's front steps and broke his arm. This is an example of a risk covered by the personal liability portion of Peter's homeowner's policy.

True

The Health Insurance Portability and Accountability Act of 1996 set new federal standards to ensure that workers would not lose their health insurance if they changed jobs.

True

The first step in developing a personal insurance program is to set insurance goals.

True

A policy that supplements your basic personal liability coverage is called a(n)

Umbrella policy