question

A term policy designed to pay off the mortgage balance in the event of the borrower's death

answer

mortgage life insurance

question

a clause in a life insurance policy that typiclally doubles or triples the policy's face amount if the insured dies in an accident

answer

multiple indemnity clause

question

a life insurance feature giving the whole life policyholder, upon policy cancellation, the portion of those assets that were set aside to provide payment for the future death claim

answer

nonforfeiture right

question

any activity that lessens the severity of loss once it occurs

answer

loss control

question

the accumulated refundable value of an insurance policy; results from the investment earning on paid in insurance premiums

answer

cash value

question

the process used by insurers to decide who can be insured and to determine applicable rates that will be charged for premiums

answer

underwriting

question

permanent cash value insurance that combines term insurance (death benefits) with a tax sheltered savings/ investment account that pays interest, usually at competitive money market rates

answer

universal life insurance

question

a clause in a life insurance contract containing a waiver of premium benefit alone or coupled with a disability income

answer

disability clause

question

a contract between the insured and the insurer under which the insurer agrees to reimburse the insured for any losses suffered according to specified terms

answer

insurance policy

question

a person who receives the death benefits of a life insurance policy after the insured's death

answer

beneficiary

question

a term insurance policy written for a given number of years with coverage remaining unchanged throughout the effective period

answer

straight term policy

question

a method of determining the amount of life insurance coverage needed by multiplying gross annual earnings by some selected number

answer

multiple of earnings method

question

life insurance designed to offer ongoing insurance coverage over the course of an insured's entire life

answer

whole life insurance

question

avoiding an act that would create a risk

answer

risk avoidance

question

an option in a life insurance contract giving the policy holder the right to purchase additional coverage at stipulated intervals without providing evidence of insurability

answer

guaranteed purchase option

question

life insurance in which the benefits are a function of the returns being generated on the investments selected by the policyholder

answer

variable life insurance

question

life insurance sold in conjunction with installment loans

answer

credit life insurance

question

insurance that provides only death benefits for a specified period and does not provide for the accumulation of cash value

answer

term life insurance

question

a term insurance policy that maintains a level premium throughout all periods of coverage while the amount of protection decreases

answer

decreasing term policy

question

A term life policy provision allowing the insured to convert the policy to a comparable whole life policy.

answer

Convertability

question

Benefits under social security intended to provide basic, minimum support families faced with the loss of a principal wage earner.

answer

Social Security Survivor benefits

question

A life insurance policy that pays policy dividends reflecting the difference between the premiums that are charged and the amount of premium necessary to fund the actual mortality experience of the company.

answer

Participating policy

question

the purchase of insurance is a common form of which risk management technique

answer

risk transfer

question

insurance is a tool that can lessen ___ risk

answer

economic

question

the basic purpose of insurance is to protect you from the results of accidental losses t/f

answer

true

question

annual term insurance premiums increase as you get older while whole life insurance premiums remain constant t/f

answer

true

question

if the objective of your life insurance program is to get the greatest death protection now for your insurance dollars, you should choose ___ insurance

answer

term

question

which of the following forms of life insurance requires the lowest premium per dollar of initial death benefits?

answer

term life

question

___ is not a type of term insurance

answer

not annual renewable

question

mary lou died from a heart attack. her 20000 dollar policy had a double indemnity clause. her beneficiary will receive 40000 t/f

answer

false

question

which of the following policy features allow the insured to increase coverage periodically without showing proof of insurability

answer

guaranteed purchase options

question

if a named beneficiary does not survive an insured the proceeds of the policy revert to the insurance company t/f

answer

false

question

all types of life insurance offer a cash surrender value t/f

answer

false

question

whole life policies typically provide a high investment rate or return t/f

answer

false

question

using the ___ approach is the most accurate method to determine life insurance needs

answer

needs analysis

question

the primary purpose of life insurance is to protect family members financially after one's death t/f

answer

true

question

Kurt purchased a plicy with an initial premium of 3000 and may elect how much he desires to pay in premiums from now on. he has purchased a face value of 100000 and can accumulate cash value. what type of life insurance does kurt have

answer

universal life

question

in determining available resources to offset economic needs you would generally not consider

answer

earning potential of financially independent children

question

the basic assumptions that the compnay used to compute its life insurance premiums include all but

answer

none of these (age, sex, health status)

question

you may reinstate your lapsed life insurance policy without answering health related questions again t/f

answer

false

question

underwriting is best described as

answer

activities related to selecting acceptable risks so that general insurer objectives are met

question

the probability of a loss occurring can be reduced by

answer

loss prevention

question

the insurance portion of a universal life policy is most analogous to

answer

term insurance

question

guaranteed renewable term insurance allows you to renew the policy for another term without qualifying medically t/f

answer

true

question

A provision often included in health insurance policies to prevent the insured from collecting more than 100% of covered charges.

answer

Coordination of Benefits Provision

question

A hybrid form of HMO that allows members to go outside the HMO network for care and reimburses them at a specified percentage of the cost.

answer

Point-Of-Service Plan

question

Insurance that provides families with weekly or monthly payments to replace income when the insured is unable to work because of a covered illness, injury, or disease.

answer

Disability Income Insurance

question

A health insurance plan administered by the federal government to help persons age 65 and over, and others receiving monthly Social Security disability benefits, to meet the health care costs.

answer

Medicare

question

A tax-free savings account funded by employees, employer, or both to spend on routine medical costs.

answer

Health Savings Account

question

A health care plan in which subscribers or users contract with the provider organization, which uses a designated group of providers meeting specific selection standards to furnish health care services for a monthly fee.

answer

Managed Care Plan

question

Health Insurance consisting of contracts written between a group, and the health care provider.

answer

Group Health Insurance

question

A clause included in most individual health insurance policies permitting permanent or temporary exclusion of coverage for any physical or mental problems the insured had at the time the policy was purchased.

answer

Preexisting Condition Clause

question

Prepaid hospital and medical expense plans under which health care services are provided to a plan participants by member hospitals and physicians.

answer

blue cross/ blue shield plans

question

a voluntary program under medicare (commonly called part D), insurance that covers both brand-name and generic prescription drugs at participating pharmacies. participants pay a monthly fee and a yearly deductible and must also pay part of the cost of prescriptions, including a co payment or co insurance

answer

prescription drug coverage

question

The delivery of medical and personal care, other than hospital care, to persons with chronic medical conditions resulting from either illness or frailty.

answer

Long-term Care

question

An organization of hospitals, physicians, and other health care providers who have joined to provide comprehensive health care services to its members, who pay a monthly fee.

answer

Health Maintenance Organization

question

commonly called plan c, these plans provide medicare benefits to eligible people, but they differ in that they are administered by private providers rather than by the gov't. common supplemental benefits include vision, hearing, dental, general checkups, and health and wellness programs

answer

medicare advantage plans

question

Health insurance plan in which the health care provider is separate from the insurer, who pays the provider or reimburses you for a specified percentage of expenses after a deductible amount has been met.

answer

Indemnity Plan

question

tens of millions of Americans are not covered by health insurance t/f

answer

true

question

which of the following programs is a joint federal and state public assistance program that provides health insurance benefits to those who are unable to pay for healthcare

answer

medicaid

question

group health insurance premiums are usually lower than individual health insurance premiums t/f

answer

true

question

the majority of employers pay

answer

part of the premium for workers and dependents

question

workers compensation is a state program that provides benefits for

answer

workers suffering injury or illness on the job

question

suppose janet, a skilled neurosurgeon, became unable to perform surgery because of severe arthritis. which is not true

answer

if the policy contains an own occupation definition of disability the insurer will provide coverage only if janet would not be able to perform another type of job such as teaching or consulting

question

the average american worker is more likely to die premautrely than to be disable before 65 t/f

answer

false

question

accidents are the primary cause of disabilities t/f

answer

false

question

disability income benefits under social security will be paid as long as you cannot perform the duties of the job you were holding when the disability began t/f

answer

true

question

disability income insurance provides benefits that are designed to

answer

substitute for lost income

question

starting in 2014, the affordable care act requires insurance companies to set premiums based on all except

answer

not tobacco use or community where you live

question

insurers are required to cover people with pre existing medical condition without limiting or setting unrealistically high insurance rates t/f

answer

true

question

the affordable care act requires employers to offer health insurance benefits to all full time employees t/f

answer

false

question

the insurance designed to help with nursing home or in home custodial care due to chronic illness is called

answer

long term care

question

which would tend to increase the premium on a disability policy

answer

use of any occupation definition of disability instead of own occupation to which one is reasonably suited

question

disability income benefits under social security will be paid as long as you cannot perform the duties of the job you were holding when the disability began t/f

answer

false

question

insurance that protects against the financial consequences that may arise from the insured's responsibility for property loss or injuries to others

answer

liability insurance

question

insurance coverage that protects real and personal property from catastrophic losses caused by a variety of perils, such as fire, theft, vandalism, and windstorms

answer

property insurance

question

coverage that protects against loss to an insured automobile caused by any peril other than collision

answer

comprehensive automobile insurance

question

losses a PAP provision that protects the insured against claims made for bodily injury

answer

bodily injury liability

question

failing to act n a reasonable manner or to take necessary steps to protect others from harm

answer

negligence

question

the amount necessary to repair, rebuild or replace an asset at today's prices

answer

replacement cost

question

in property insurance a provision requiring a policyholder to but insurance in an amount equal to a specified percentage of the replacement value of their property

answer

co-insurance

question

automobile insurance that pays for collision damage to an insured automobile regardless of who is at fault

answer

collision insurance

question

The principle that insurance policies should provide a benefit no greater than the loss suffered by an insured.

answer

principle of indemnity

question

additional coverage that allows the insured to collect damages from his or her own insurance company when they are not collectible from the person who caused the harm

answer

uninsured motorists coverage

question

property and liability insurance covering all perils unless they are specifically excluded

answer

comprehensive policy

question

automobile insurance designed to meet the needs of "innocent" victims of accidents who are negligently injured by uninsured, under insured, or hit and run motorists

answer

uninsured motorists coverage

question

A value assigned to an insured property that is determined by subtracting the amount of physical depreciation from its replacement costs

answer

actual cash value

question

an insurance endorsement or policy providing either blanket or scheduled coverage of expensive personal property not adequately covered in a standard homeowner's policy

answer

personal property floater

question

A PAP provision that protects the insured against claims made for damage to property

answer

property damage liability losses

question

Laws requiring motorists to buy a specified minimum amount of automobile liability insurance or to provide other proof of comparable financial responsibility

answer

financial responsibility laws

question

A comprehensive automobile insurance policy designed to be easily understood by the "typical" insurance purchaser

answer

Personal automobile policy (PAP)

question

property and liability insurance policy that individually names the perils covered

answer

named peril policy

question

a cause of loss

answer

peril

question

Donna, who is single and 30-years-old, has received several speeding tickets recently and was shocked by the effect of her auto insurance. Donna drives a 2002 Pontiac Firebird, is currently not covered by health insurance, has an emergency fund of $25,000, an income of $100,000 per year, and an investment portfolio of $230,000. She is trying to reduce the price of her auto insurance. Which of the following actions is most likely to be advisable?

answer

Raise her deductible from $250 to $1,000

question

your auto liability insurance shows policy limits of $100,000/$300,000.

answer

This means $100,000 limit per individual with a $300,000 limit per accident

question

The right of ____ gives the insurer the right to recover its costs from the at-fault party after the company has paid a claim to its insured.

answer

subrogation

question

If you have two insurance policies on the same property, the ____ clause explains how the two insurance companies will share the loss.

answer

other insurance clause

question

Coinsurance is a policy provision to discourage the policyholder from being

answer

underinsured.

question

The personal liability umbrella policy typically includes coverage for liability losses that are in excess of the limits purchased in the comprehensive personal liability coverage provided in the homeowner's policy. t/f

answer

true

question

After packing up to return home for the holidays after the fall semester, Tex stopped at Double T bookstore to sell textbooks. After collecting $25, he headed back to his pickup truck only to find a broken window, the truck broken into, and all his suitcases and personal property gone. The loss of his personal property and suitcases would be covered by

answer

personal property off premises (homeowners coverage)

question

your car is damaged by fire while parked in your garage, protection would be provided by

answer

other than collision auto coverage

question

if you have an outstanding loan on your car the contract will require you to carry ____ insurance

answer

collision and other than collision

question

generally actual cash value is defined as

answer

replacement cost minus depreciation

question

personal property floaters provide increased coverage for jewelry and other collectable items at an additional premium t/f

answer

true

question

auto insurance is needed primarily because of

answer

potential liability claims

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