1. Insurance- MoneyPower – Flashcards

When Jessie needs health care, she must first go to her primary care physician who coordinates her care and decides whether Jessie should see a specialist. Jessie pays $10 as the co-pay when she sees her primary care doctor. Jessie has which type of health insurance? • Fee-for-service health plan • Managed care health plan • Medicaid health plan • Comprehensive health plan

You have a $2,000 loss. Your insurance company pays you $1,500 on the claim for the loss. The $500 the insurance did not pay is a result of your policy having a: • Co-insurance clause • Deductible • Hazard clause • Premium

The purpose of Insurance is NOT to: • Diversify an investment portfolio • Share risk with other policy holders and the insurance company • Protect assets • Protect against potential losses

Mr. Akon's wife died. The money he received as the beneficiary on her life insurance is called the: • Cash value • Death benefit or face value • Separate value • Premium or annuity value

Which statement does NOT accurately describe a characteristic of cash value for whole life insurance? • Cash value grows gradually over time • If the policy is canceled, you may be entitled to some or all of the accrued cash value • Policy that accumulates cash value is less expensive than a policy that does not accumulate cash value • When an insured person dies, the beneficiary will receive the death benefit but the insurance company keeps the cash value

A person buys a homeowner's insurance policy with a $250 deductible, which means the person will: • have to pay a quarterly premium of $250. • have to pay the first $250 which will be deducted from the claim settlement paid by the insurance company. • only receive payment from the insurance company of $250 for any single article damaged • not be responsible for the first $250 of the claimed damages.

Sally's health insurance policy requires her to pay the first $500 of medical costs each year before the company will pay any of her medical bills. This policy provision is the: • Co-insurance clause • Premium • Annual deductible • Major medical benefit

Gwen receives a bill from her auto insurance company, and she sends a check to the company to make sure her policy is not canceled. The cost of her policy is called the: • Co-insurance clause • Premium • Deductible • Exclusion

Richard's auto insurance policy expired on 5/15/2002. Richard was upset with his insurance agent and decided to change insurance companies. At 10:00 a.m. on 5/16/2002, as he drove to a different agent to buy a new policy, he had an accident. Who is liable for damage to his car and his personal injuries? • The old agent • The new agent • Richard • The old agent is liable for damage to your car and the new agent for personal injuries

If you have a managed health care plan, it means that you: • Usually must first meet with your primary health care physician • Can go to any doctor at any time • Will be responsible for $100 of a doctor bill • Can apply for an 80% reimbursement of the amount paid to the doctor

Neil will be traveling by air in Southeast Asia for a six-week vacation. Which step WILL NOT provide protection during the trip? • Buy baggage claim insurance • Take his passport • Buy flight insurance • Buy medical insurance that covers him when he travels internationally

Which of the following insurance covers vehicles? • Mortgage • Racing • Automobile • Life

Debbie owns a clothing store. She is concerned that a customer who is injured in the store will sue. Which type of insurance should Debbie purchase? • Social insurance • Life insurance • Surety bonds • Liability insurance

John's job provided the main income for his family. He died unexpectedly and had no life insurance. The probable financial consequence for his wife and two children does not include: • The loss of John's income • A reduction in the family's standard of living • Death-related expenses to be paid • An increase in income and expenses

For the past five years, a person has had a $20,000 whole life insurance policy that has a cash value clause. The person decides to surrender the policy. At the time of surrender, the person will receive: • one-fifth of the $20,000 face value. • $20,000 less the premiums paid. • a calculated amount of money which includes the premiums paid as well as the interest on that money • a calculated amount of money that must be converted to a term life insurance policy.

Why is term life insurance usually the least expensive type of life insurance? • The policy only pays a death benefit • The policy builds a cash value • The policy provides coverage for a lifetime • The policy is available to all consumers

Insurance is frequently described as a method of "sharing the risk" because the: • Risk of loss is shared with the insurance company sales person • Insured shares the risk of loss with all the other policy holders • Insured can share the risk by spreading the cost over a number of years • Risk of loss is shared with the government

When a self-employed person decides to purchase disability insurance it is generally to • lessen the possibility of becoming injured. • protect against the financial effects of not being able to work. • eliminate the chance of going out of business. • insure that the cost of injury caused to others will be reimbursed

Ben's truck is crushed by a hit-and-run driver. Scott is hit by an uninsured driver. How will they receive payments? • State motorist coverage • Uninsured or no-fault motorist coverage • Insolvent motorist coverage • Auto liability coverage

Lucy has no insurance. The situation(s) should she consider insuring against first are: • Death so her financial obligations are paid • Losses resulting from an illness, accident, or disability • Property losses and auto accidents • Auto collision, and burglary

A woman has just received a very expensive piece of jewelry. The woman has homeowner's insurance. Which statement would it be most appropriate for her to make to her insurance agent? • "I think I need a personal property floater." • "I think I should get speculative risk insurance." • "I will deduct the cost of the jewelry from my premium." • "I realize that if this jewelry is stolen it will be considered vicarious liability."

A person buys a flat screen, plasma, theater-like television. The person has homeowner's insurance. Why would it be appropriate to add a personal property floater to that insurance? • To reduce the premium on the homeowner's insurance • To protect the person who owns the television from liability for damages. • To show the insurance company a good faith investment has been made • To cover the cost of replacement should the television get damaged or stolen.

Sally took out a $50,000 life insurance policy. The $50,000 amount of coverage is called the: • Cash value • Premium value • Death benefit or face value • Annuity value

The only type of life insurance that does not develop a cash value is: • Term life insurance • Whole life insurance • Universal life insurance • Variable universal life insurance

Generally, the higher the deductible on an insurance policy, the • greater the premium • lower the premium • more frequently the premium has to be paid. • less frequently the premium has to be paid.