Finance Chapter 9++

typical family takes into consideration the following

# of children above avg family debt suffer from poor health poor employment potential

factors that affect the price of an insurance policy?

- company cost of doing business - return on its investments -mortality reate it expects amoung its policy holders - features the policy contains - competition amount companies with comparable policies

before buying a long term care insurance policy all of the following is important to know

- know what services are covered -know how long the benefits will last - know how long before benefits begin

health insurance portability and accountability act of 1996 provides

- new standards so workers would not lose health insurance if they change jobs - a parent with a sick child can move form one health plan to another without paying more for coverage than other employees do

life insurance proceeds can be used wisely to

- pay off home mortage or other debts -provide lump sum payments -provide education or incoem for children -make chartiable donations after death - provide retirement income -accumulate savings

fixed annuities = variable annuities =

-same income for a certain period of life - monthly payments vary based on income received from stocks and investments

administrative costs represent what percentage of health care costs in the united states?

26%

by contracting several insurance agents to compare premiums, you can save as much as or more than ___ on insurance costs

30%

qualify must have to be eligible for medicare?

65 or older, disabilites, end stage renal disease

the easy method is based on the assumption that it will take ___ years to adjust to financial consequences of death

7

important to fund before funding annuities

IRA keoghs 401k

the health insurance portability and accountability act of 1996 provides:

a parent with a sick child can move from one health plan to another without paying more for coverage than other employees do - new standards so workers would not lose health insurance if they change jobs

increase in health care costs

aging, overweight population, cost of prescription drugs, uninsured, adn advancement in medical technology

a poor disability plan pays you when you cannot work ___ job

any

when looking at life expectancy tables, the life expectancy of a male at age 30 is 47.2. 47.2 is the ___ number of additional or remiang years a male may expect to live

average

choosing never to drive to work, so you are not in an accident is an example of risk ___

avoidance

risk management techniques

avoidance, assumption, reduction

medicare part ____ covers many doctors services and other health services not covered by part a

b

person named in a life insurance policy to recieve benefits fromthe insurance company is called

beneficiary

most consumers, term life insurance is considered to be the :

best value

independent, nonprofit membership cororation that provides protection against the cost of hospital care

blue cross

independent, non profit coporation that provides protection against the cost of surgical and medical care not hospital care

blue shield

homeowners insurance policies provide coverage for the ___ in which you live and any other structure on the property

building

home owner policy

building in which you live or other stuctures on property additional living expenses personal property personal liability and related coverage specialized coverage

negligence is failure to take reasonable or ordinary ___ in a situation

care

negligence is failure to take reasonable or ordinary ____ in a situation

care

the amount you can collect with collision insurance is limited to the actual ___ value of the automobile at the time of the accident

cash

a universal life is essentially a term policy with a ___ ___

cash value

amount received after giving up a whole life type of insurance policy is called

cash value

to utilize the interest adjusted index, which of the following are included in the equation?

cash value buildups premium payments dividends

strategies help reduce the financial impact of a disability?

collecting disability income form a disability insurance policy public sector disability insurance social security saving and investing

what are some ways of reducing premiums on automobile insurance ?

completing driver training comparison shopping for automobile insurance maintaining a safe driving record installing security devices

insurance is complete major medical insurance that has a very low deductible

comprehensive

provision under which the insured pays a flat dollar amount each time a covered medical service is received after the deductible has been met is called:

copayment

when purchasing insurance you can get the best value by selecting the appropriate ___ amount and being aware of ____ that affect insurance costs

coverage factors

home owners insurance

coverage for a place of residence and its associated financial risk

risk assumption actions

deciding not to purchase collision insurance self insuring

health reimbursements accounts (HRA) are tied to high ___ insurance policies

deductible

increasing your __ lowers your premium

deductible

increasing your _____ lowers your premium

deductible

insurance that provides reimbursement for the expense of service and supplies and encourages preventive care for teeth?

dental expense insurance

primary factor for determining premiums for whole lie insurance policy

depends mostly on the age at which you purchase the insurance

___ income insurance protects your most valuable asset; your ability to earn money

disability

health insurance is one way people protect themselves against economic losses due to :

disability illness accident

insurance provides payments to replace income when a insured person is unable to work?

disability income insurance

non participating polices do not provide policy ___

dividends

participating or par polices refund part of the policy premium called a policy ___.

dividends

people that live alone or with their parents mostly likely think no dependents

do not need life insurance

a benefit under which the company pays twice the face value of the policy if the insured's death results from an accident is called a:

double indemnity

your insuracne __ ___ is based on your gender age and driving record

driver classification

not all group policies cover the needs of all ___. Additional coverage may be needed

employees

the limited installment payment option allows for the payment of life insurance to be paid in ___ periodic installments for a specified number of years after death

equal

insurance is a protection against possible ___ loss, and provides protection against many ___

financial risk

a health maintenance organization (HMO) is a health insurance plan that provides a wide range of health care services for an ___ monthly premium

fixed prepaid

the non forfeiture clause is a provision that allows the insured not to ___ all accrued benefits

forfeit

coverage of HO-3 policies include

freezing fire and lighting theft smoke

liability insurance usually covers

friends, guests, babysitters

homeowners coverage also involves detached structures on your property such as

garage or toolsheed trees, shrubs, plants

federal laws have provided federal standards for ___ renewability provision in health insurance poilices

guaranteed

defective house wiring is an expmple of

hazard

a health insurance plan that provides a wide range of health care services for a fixed prepaid monthly premium is called

health maintenance organization (HMO)

a home located in an area where there is a history of high claims will have __ Premiums

higher

basic health insurance coverage is a combination of :

hospital expense coverage surgical expense coverage physician expense

policy pays benefits when you are hospitalized that are in cash and you can spend as you choose

hospital indemnity policy

non working spouse method takes into consideration the cost of replacing the service of

housekeeper, childcare meals out additional carfae laundry services

health insurance is one way people protect themselves against economic losses due to

illness disability accident

immediate annuity and deferred annuity payments begin at once = payments ate some future date=

immediate annuity deferred annuity

hmo preventive care services include periodic checkups as well as

immunizations checkups screeningsprograms diagnostic tests

an annuity is a contract that provides regular ___ for as long as a person lives

income

provision stating that the insurer cannot cancel a plicy after a specific period, often 2 years is called

incontestability clause

the added use of technology, use of presciption drugs, life expectany of the elderly, and accidents and crimes all lead to ____ health care costs

increase

the added use of technology use of presciption drugs life expeectany of the elderly, and accidents and crimes all lead to ____ health care costs

increased

insurance provides protection against many types of risks including all of the ones listed

injury illness unexpected property loss

deductible is an amount the policy holder must pay before benefits become payable by the ____ company

insurance

disability insurance provides payments to replace ___ when an insured person is unable to work

insurance

the deductible is an amount the policyholder must pay before benefits become payable by the ____ company

insurance

cash value policies are good for people who

intend to keep policy long term or more structured way to save

___ income earned on annuities is tax free during accumulation

interest

a household ___ is a list or other documentation of personal belongings with purchase dates and cost information

inventory

price paid for insuring your home and your car should be thought of as

investment for protecting your resources

physician expense insurance provides...

lab tests x rays routine doctor visit Doctors' fees for nonsurgical care

a group insurance plan insures an ___ number of people under the terms of a single policy without requiring ___ examinations

large medical

decreasing term insurance policy pays the beneficiary __ as time passes

less

legal responsibility for the financial cost of another persons losses or injuries is known as

liability

insurance provides liquidity at eh time of death?

life insurance

___ -_________ care insurance provided day in day out care for extended illness or disability

long terms

personal risks are uncertainties surrounding loss of income or life due to

loss of income loss of life due to illness disability old age unemployement

amount of impace inflation has on a fixed amount of money?

loss, reduction, erosion of purchasing power

low interest adjusted index = high interest adjusted index =

lower cost higher cost

disability plans long waiting period = short waiting period =

lower premiums higher premiums

financially strong company = financially weak company=

lower rates higher rates

____ medical expense insurance pays most of the costs exceeding those covered by the hospital, surgical, and physician expense polices

major

___ was designed to provide medical assistance normally to low income families and individuals who are eligible to recieve payments under one of the cash assistance programs

medicaid

____ insurance supplements Medicare by filling the difference between medicare payments and medical costs not covered by medicare?

medigap

best insurance plan

minimization of risk is the key to good insurance planning

goals of insurance

minimize personal property liability risks

lump - sum payment, the insurance company pays the face amount of the policy in ___ installments to the beneficiary or to the estate of the insured

one

covered by home owner's policy

other structure, house, personal property

mutual life insurance companies generally sell ___ or par policies

participating

driving in a snowstorm would be a possible ___ which would increase the likelihood of a crash (loss ) which woould be a ___

peril hazard

classified as pure risk

personal risk property risk liabiltiy risk

comprehensive insurance for your car covers ___ damage to your car from such risks as fire, theft, falling objects, hitting an animal

physical

network of selected contracted participating providers, also called an HMO - PPO hybrid is a:

point of service plan

life insurance is when a person joins a risk sharing group known as an insurance company and purchases a contract also called an insurance ___

policy

shifiting of risk is done through the purchase of an insurance ___ from an insurance company

policy

contract that is purchased by the insured person when joining a risk sharing group is known as

policy * contract is known as policy

insurance policy requires the payment of an annual ___ as part of a contract to cover the risk

premium

the main influences on the __ paid for home and property insurance include location, type of structure, and policy type

premium

managed care refers to ____ health plans that provide comprehensive health care to members

prepaid

2 groups pay the majority of the nations health care bill, leading to a lack of incentives to cut down on costs?

private health insurers government

characteristics should you consider in an insurance company

professionally qualified representatives financial stability

health insurance is a form of ___ to alleviate the financial burden individuals suffer from illness or injury

protection

a point of service plan is a network of selected contracted participating ___

providers

a preferred provider organization (PPO) is a group of doctors and hospitals that agree to provide health care to members at ____ fees

prrearranged

your insurance protection for your home should be based on the amount needed to ___ or repair your house and not the amount you originally ___ for the home

rebuild paid

document attached to a policy that modifies its coverage is called

rider

general risk management techniques

risk avoidance risk reduction risk assumption risk shifting

main types of risk related to a home and automobile are

risk of damage to or loss your property responsibility for injuries to other people or damage to their property

not eating a high fat diet, and exercising is a good example of lowering the chances of illnessess

risk reduction

property risk of loss or damage that creates loss of use includes

robbery burglary vandalism arson

multiyear level term insurance, rather than annual renewable term insurance, is advantageous because it allows you to pay :

same premium for the duration of your policy

steps for insurance planning

set insurance goals develop plan to reach your goals put your plan into action check your results

not covered my medicare

skillled or long term nursing care out of hospital prescription drugs routinue checkups dental care most immunization

HO-4 covers

smoke wind windstorm fire

one of the financial strategies due to the death of a spouse is to

social security survivor benefits

starting a small business, buying risky stocks, going to the casinos are all examples of

speculative risks * risks that are not insurable

medicaid is funded by

state and federal funds

a provision under which an insured pays all costs up to a certain amount, after which the insurance company pays 100% of the remaining covered expenses is called a (found under major medical expense insurance coverage):

stop loss

name of provision stating that if the insured dies by suicide during the first 2 years that the policy is in force then the death benefit will equal the amount of premium paid is

suicide clause

as a rule you should deal with insurance companies with a ____ or ___ rating

superior excellent

term life insurance is an ___ life insurance option

temporary

life insurance protection for a specified period of time is called

term

an accidental death policy states that the insurer will pay __ the face value if the insured dies in a n accient. the insured usually must die before a certain age usually 60 or 65 in order to receive benefits

twice

policy supplements your basic personal liability coverage and provides protection for injury claims

umbrella policy

whole life policy that combines term insurance and investment elements is called

universial life insurance

the DINK method may not be the best method for individuals who have

unstable income spouse in poor health

if anyone suffers from poor health or there are more than 2 children under age 13 the non working spouse method should be adjusted

upward

incontestability clause states that the insurer cannot dispute the ____ of a policy after a specific ___

validity period

main factors that influence premiums for automobile insurance are

vehicle type rating territory driver classification

household inventory inclues

video recording photographs of your home and its contents

plan where the policyholder pays the same premium for as long as they live is called a

whole life policy

sources of disability income coverage

workers compensation social security employer plans

the main bodily injury coverages are

bodily injury liability medical payments uninsured motorist protection

insurance companies require that in order to have the personal property floater the insured must

detailed description and worth item appraised or evaluated by expert

negligent actions

improperly supervising children in swimming pool, failing to remove large items from staircase

coinsurance is a provision under which the ____ share the covered losses

insured and insurer

hospital expense insurance pays part or all of hospital bills for ____, board, and other charges

room

hospital expenses insurance pays part of hospital bills for ___ , board, and other charges

room