Personal Finance Chpt 21-23
A building insured for $300,000 is likely to have contents covered for at least
150,000
This law allows people who leave employment to continue their health insurance under the company plan for a limited period of time.
COBRA
is insurance coverage for the insured's movable property wherever it may be located.
a personal property floater
Which of the following is NOT a requirement under the Affordable Care Act?
All covered medical services must be provided without co-pays.
All life insurance policies are in effect until the death of the insured.
F
An insurance company cannot deny a claim under a life insurance policy because the insured committed suicide.
F
Automobile insurance that pays for your injuries when the other driver is legally liable but unable to pay is called umbrella liability insurance.
F
Dental insurance plans usually have high deductibles and co-insurance requirements of 50 percent or more.
F
Essentially, insurance is a way to enrich policyholders.
F
Homeowners are typically held liable for damages to both guests and trespassers.
F
Insurance companies typically charge higher premiums on family cars than on sports cars.
F
Most employers pay the entire cost of group health insurance for their employees.
F
Only a handful of states require minimum automobile insurance.
F
Renters must insure their own property as well as their part of the building they rent.
F
The premiums for individual health insurance policies are usually less expensive than for group policies.
F
Typically, every loss a renter or homeowner suffers will be covered by property insurance.
F
When all of the five basic types of auto insurance are purchased together in a single policy, it is known as comprehensive coverage.
F
The amount of money payable to a policyholder upon discontinuation of a life insurance policy is called the face amount.
False
The three major insurable risks are pure, economic, and speculative.
False
means putting the policyholder back in the same financial condition he or she was in before the loss occurred.
Indemnification
Government-sponsored health insurance for people with low incomes is called
Medicaid
risk is a chance of loss with no chance for gain.
Pure
The cost of replacing an item regardless of its actual cash value is called
Replacement value
A homeowner's property inventory needs to be more detailed than a renter's household inventory.
T
Comparison shopping can save renters and homeowners a considerable amount of money on their insurance.
T
Generally, people insure the contents of their house for at least half the value of the building.
T
Generally, the higher the deductible, the lower the insurance premium.
T
If you don't use the money in your Flex 125 Plan by the end of the year, you lose it.
T
Insurance will reimburse the actual cash value of a loss unless your policy includes a replacement value clause.
T
Insurers cannot predict which specific individuals will suffer losses.
T
PPOs are more flexible than HMOs, so they are more expensive.
T
People who are named in a life insurance policy who will receive the benefits of the policy are called beneficiaries.
T
Retired individuals pay a monthly premium for Medicare insurance, which is deducted from their Social Security payments.
T
Term life insurance policies have no savings component.
T
The Affordable Care Act requires everyone to have health insurance or face a penalty for failing to do so.
T
The financial strength of an insurer can be a major factor in keeping down insurance costs.
T
The main component of homeowners insurance is protection against financial loss due to damage or destruction.
T
To receive maximum reimbursement, participants in a managed health care plan must select doctors who belong to the network.
T
Variable life insurance combines a death benefit with investment options.
T
Workers' compensation insurance also carries a death benefit.
T
Which of the following is true about level term insurance?
The death benefit is the same at the end of the term as it was at the beginning of the term.
A preferred provider organization is
a group of health care providers who join together to provide health services for set fees.
provides a set of government-regulated and standardized health care plans from which uninsured and underinsured individuals may purchase health insurance policies.
a health insurance exchange
Every state has a(n)------that consists of people who are unable to obtain auto insurance due to the high risk they present.
assigned-risk pool
Which of the following techniques is not recommended for a serious risk?
assume risk
nuisance is a dangerous place, condition, or object that is particularly tempting to children.
attractive
lowers the chance for loss by not doing the activity that could result in the loss.
avoidance
Which of the following will likely result in lower insurance costs?
buy more than one type of insurance from the same company
The savings accumulated in a permanent life insurance policy that you would receive if you canceled your policy is called
cash value
clause is a provision included in most property insurance policies that requires policyholders to insure their building for a stated percentage of its replacement value in order to receive full reimbursement for a loss.
coinsurance
Which type of auto insurance protects your own car against damage from auto accidents?
collision
The most complete homeowners insurance policy coverage is called
comprehensive
coverage protects you from damage to your vehicle from causes such as fire, theft, falling objects, and acts of vandalism.
comprehensive
All of the following are common types of permanent life insurance except
convertible life
is a group health insurance program that specifies how the insurers will share the cost when more than one policy covers a claim.
coordination of benefits
an insurance plan that makes regular payments to replace income lost when illness or injury prevents the insured from working.
disability insurance
means that the beneficiary of a life insurance policy is paid twice the face amount of the policy.
double indemnity
A written amendment to an insurance policy is called a(n
endorsement
Items that insurance policies specifically will not cover are called
exclusions
a type of health insurance in which all those insured have the same coverage and pay a set premium.
group insurance
renewability of insurance coverage will protect you against cancellation if your health declines.
guaranteed
A condition that creates or increases the likelihood of some loss is called a
hazard
can be used to pay qualified medical expenses not covered by insurance, including deductibles and co-payments.
health savings account
Making an investment to help offset against loss is called
hedging
is a method for spreading individual risk among a large group of people.
insurance
This type of risk includes the cost of another person's losses for injuries at your property.
liability
risk is the chance of loss that may occur when your errors or actions result in injuries to others or damages to their property.
liability
insurance provides funds to the beneficiaries when the insured dies.
life
provides protection against the catastrophic expenses of a serious injury or illness.
major medical coverage
Automobile insurance premiums are based on a number of different factors. Which of the following would NOT be one of those factors?
occupation of driver
policies include several types of insurance coverage in a single contract and usually carry a lower premium than you would pay for each coverage purchased separately.
package
Under an insurance policy, the insurer agrees to assume an identified risk when the policyholder pays a fee called the
premium
Your main health care provider in an HMO plan is called your------care physician
primary
All of the following types of insurance protect against personal risk except
property insurance
Using seat belts or installing smoke alarms in your home are examples of risk
reduction
A(n) __________ to an insurance policy is an addendum that modifies the coverage of the main policy.
rider
Understanding the types of risk you will face and their potential consequences is called
risk assesment
is an organized strategy for controlling financial loss from pure risks.
risk management
Buying insurance is an example of
risk shifting
A Flex 125 Plan allows employees to
set aside money—pretax—to help pay certain medical expenses.
Which of the following would not be an insurable risk?
speculative risk
liability insurance supplements your basic auto and property liability coverage by expanding limits and including additional risks.
umbrella
If you are in an auto accident that is your fault and your insurance company has to pay claims,
your premium will probably go up
