Insurance Basics
If you are in an accident and submit an insurance claim which results in a settlement and payment, you can’t also personally sue the individual. This illustrates what principle of insurance?
(8-1)
a. Indemnity
b. Exclusion
c. Exemption
d. Subrogation
d. Subrogation
Wearing a seatbelt when you drive would…
(8-1)
a. Reduce the severity of the risk
b. Reduce the frequency the risk
c. Transfer the risk
d. Avoid the risk
a. Reduce the severity of the risk
An HMO (Health Managed Organization) is different from a PPO (Preferred Provider Organization) in that?
(8-2)
a. If you travel a lot, choose an HMO
b. An HMO typically has cheaper premiums
c. There are more doctors to choose from in a HMO
d. An HMO allows you to choose a provider within a larger “in-network” group.
b. An HMO typically has cheaper premiums
Income from disability insurance is a taxable benefit.
(8-3)
a. True
b. False
a. True
The following statements are true of Term Life Insurance except…
(8-3)
a. Most popular type of life insurance.
b. Set for a period of time.
c. You could outlive your policy.
d. Has a cash value component.
d. Has a cash value component.
A lower policy deductible makes the monthly insurance policy premium?
(8-4)
a. Lower
b. The same regardless
c. Higher
d. No effect on the premium cost
c. Higher
Fraudulent purchases on your debit card are limited to expose you to $_____ per charge. (8-5)
a. $0
b. $50
c. $200
d. Varies depending on the amount of time since the fraud occurred.
d. Varies depending on the amount of time since the fraud occurred.
If you put a protective case on your cell phone, you'd be…
(8-1)
a. Mitigating risk by reducing the severity of loss.
b. Mitigating risk by reducing the frequency of loss.
c. Avoiding the risk of loss.
d. Transferring the risk of loss.
a. Mitigating risk by reducing the severity of loss.
What is the amount of money paid by the insured in a claim before the insurance company pays their portion known as?
(8-1)
a. Premium
b. Deductible
c. Policy
d. Claim
b. Deductible
If Ryan has $750 deductible and $3,000 out of pocket maximum with 10% co-insurance, how much would he pay if he received medical care for $4,000?
(8-2)
a. $2,250.00
b. $1,150.00
c. $3,000.00
d. $1,075.00
d. $1,075.00
For an individual life insurance policy, underwriting is required
(8-3)
a. When the policy is issued
b. When a claim is submitted
c. A and B
d. None of the above
a. When the policy is issued
Which of the following types of insurance protects older individuals from expenses associated with care in a facility, nursing home, or in-home care? (8-3)
a. Life Insurance
b. Health Insurance
c. Disability Insurance
d. Long Term Care Insurance
d. Long Term Care Insurance
A standard homeowners insurance policy covers all of these perils except?
(8-4)
a. Floods
b. Theft & Vandalism
c. Fire or Lightning
d. Damage caused by weight of snow or ice
a. Floods
Identity theft would most likely be discovered by…
(8-5)
a. Keeping secure passwords and email
b. Shredding your personal documents
c. Not using credit cards on the internet
d. Monitoring your credit score
d. Monitoring your credit score
Insurance is a transfer technique best for…
(8-1)
a. Low Frequency, High Severity Risks
b. High Frequency, Low Severity Risks
c. Low Frequency, Low Severity Risks
d. High Frequency, High Severity Risks
a. Low Frequency, High Severity Risks
In health insurance, your deductible is “per event” so your deductible might reset multiple times a year if you have differing health issues.
(8-2)
a. True
b. False
b. False
How much life insurance should Tyson have if he earns $60,000 a year and his spouse also works?
(8-3)
a. $120,000 - $180,000
b. $240,000 - $600,000
c. $180,000 - $240,000
d. More than $600,000
b. $240,000 - $600,000
If you get into a car accident and are sued by the 2 people in the other car, what would be the maximum payment if your liability coverage was listed as $100,000/$300,000/$50,000? (8-4)
a. $300,000
b. $200,000
c. $100,000
d. $50,000
b. $200,000
Medha could not remember the insurance term for the amount paid to insurance companies in return for taking on a portion of the risk. You remind her it is called
(8-1)
a. the premium
b. a deductible
c. a hazard
d. a claim
a. the premium
The number one cause of bankruptcy is…
(8-2)
a. Student Loans
b. Unpaid medical bills
c. Business failure
d. Defaulting on student loans.
b. Unpaid medical bills
If a disability policy pays out $2,000/mo maximum, has a 5yr benefit period, and a 90 day elimination period; how much would be paid out if a person was injured and stopped working for 7 months? (and then returned to work)
(8-3)
a. $0
b. $8,000
c. $12,000
d. $14,000
b. $8,000
Which part of a home insurance policy will help pay for temporary relocation while your home is repaired due to storm damage?
(8-4)
a. Dwelling
b. Loss of use
c. Personal Property
d. Other structures
b. Loss of use
Trying to reduce the frequency and severity of a risk would be examples of what risk management technique? (8-1)
a. Avoidance
b. Transfer
c. Mitigation
d. Retention
c. Mitigation
Life insurance proceeds (the death benefit) is received by the…
(8-3)
a. Payer
b. Beneficiary
c. Owner
d. Insured
b. Beneficiary
Which part of the auto insurance policy is “compulsory” in most states?
(8-4)
a. Part A - Liability
b. Part B - Medical Payments
c. Part C - Uninsured Motorist
d. Part D - Collision
a. Part A - Liability