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BUSI 223 Quiz 5 solutions complete answers
BUSI 223 Quiz 5 solutions complete answers
Most home insurance policies provide coverage for minor accidental injuries on your property under:
If a homeowner leaves toys on stairs that results in injury to a delivery person, this may be ruled as:
Georgia Owen was in an accident in which her car was totaled. What part of Georgia's automobile insurance would cover the damage to her car?
Renter's insurance would include coverage for:
_________ coverage protects your automobile from risks such as glass breakage, falling objects, vandalism, or damage caused by hitting an animal.
The legal responsibility for the financial cost of another person's losses or injuries is referred to as:
Robert Plant pays a premium each month to State Farm Insurance for automobile insurance on his 2014 Dodge Ram pick-up truck. How is Robert managing his risk?
Which provision in a health insurance policy states that you will pay a flat dollar amount each time you receive a covered medical service?
Sophie Bennett is required to pay 20 percent of her medical costs after the deductible has been paid. What is this requirement called?
A good health insurance plan should:
Darren Chase has an insurance policy that will only pay for a maximum of 60 days of hospitalization during a year. Which provision in his insurance policy would specify this?
Dental expense insurance provides reimbursement for:
To obtain the insurance proceeds from a life insurance policy, who will have to send the policy and a copy of your death certificate to the life insurance company?
Using the Multiple of Income Method to estimate life insurance needs, what is the minimum amount of insurance needed for Susan Smith if her annual income is $60,000?
The easy method of determining life insurance needs is based on the rule of thumb that a "typical family" will need about what percent of a wage-earner's salary for seven years?
Your annual income is $45,000. What is your life insurance need based on the easy method?
Jane Smith accidentally hit a utility pole. The cost to repair her car was $2,950, and she has a $500 collision deductible. How much will the insurance company be required to pay for the car repair?
Renee Carson’s health insurance policy includes a $500 deductible and a coinsurance provision requiring her to pay 20 percent thereafter. Her medical bills total $7,000. What amount is she required to pay personally?
Your annual income is $32,000. What is your life insurance need based on the easy method?
Your home insurance provides for replacement value for personal property losses. A microwave is stolen. It cost $300 two years ago and has an expected life of six years. A comparable microwave costs $400 today. What amount will the insurance company pay?
Kyle Burroughs left his car parked on the street all night. When he came out in the morning all four of his tires had been slashed by vandals. What part of Kyle's automobile insurance would cover this damage?
What type of personal liability coverage is also called a personal catastrophe policy?
What is the most common and costly natural disaster in the United States?
Which of the following might qualify Amy Farmer for a premium discount on her automobile insurance?
The ____________ method to settle claims is based on the current replacement cost of a damaged or lost item less depreciation.
Evan McWilliams accidentally collided with a car driven by Francis Sullivan. It was Evan's fault and Francis was seriously injured and had to spend the night in the hospital. What part of Evan's automobile insurance policy would cover Francis's injuries?
Personal risks, property risks, and liability risks are types of ________ risk.
Fewer than what percent of people who live in flood-prone areas have flood insurance?
A parent may be held responsible for the actions of their child if those actions cause financial or physical harm to others. This is known as:
Your home insurance provides for replacement value for personal property losses. A microwave is stolen. It cost $300 two years ago and has an expected life of six years. A comparable microwave costs $400 today. What amount will the insurance company pay?
Starting a small business that may or may not succeed is an example of ___________ risk.
Larry Foster has bought a car with extra safety features, including front and side airbags and antilock brakes. How is Larry managing his risk?
Which one of the following would be an example of the driver classification category that helps determine insurance rates?
Tara Guest owns a home in Edmond, Oklahoma. She is worried about a tornado causing damage to her home. The tornado is an example of a:
Robert Plant pays a premium each month to State Farm Insurance for automobile insurance on his 2014 Dodge Ram pick-up truck. How is Robert managing his risk?
Property owners face potential property losses due to two risks, physical damage and:
Kevin Brown rides his bicycle to work so that he does not have to worry about getting in a car accident. How is Kevin managing his risk?
Property owners face loss of use risk due to:
Nick Wilson owns a home in Edmond, Oklahoma and pays $795 per year in insurance on the home. The $795 fee is an example of a:
Albert Finney owns a home in Pompano Beach, Florida. His house is broken into and the burglar steals his computer, his big screen TV, his stereo equipment, and his toaster. What part of his homeowner's insurance would cover this loss?
The legal responsibility for the financial cost of another person's losses or injuries is referred to as:
Henry Edwards was injured in an accident caused by another driver who did not have insurance. Henry's medical expenses would be covered by:
Self-insurance is part of:
Renter's insurance would include coverage for:
Craig Brown owns a home in San Francisco, California. There is a major earthquake and his house is damaged by the earthquake. What type of insurance would he have to have to cover this loss?
The additional living expenses component of a homeowner's insurance policy is designed to:
The most common method of dealing with risk is to:
Ginger Simpson ran off the road and hit a bridge support. She was seriously injured and spent three days in the hospital. What part of Ginger's automobile insurance policy would cover Ginger's injuries?
Damage to your roof from hail
Brett Johnson owns a home in Yukon, Oklahoma. A babysitter he hires breaks her leg when she trips over the dog. What part of his homeowner's insurance would cover this loss?
________ coverage protects your automobile from risks such as glass breakage, falling objects, vandalism, or damage caused by hitting an animal.
Uninsurable risks are considered _____ risk.
Another term for liability insurance that protects you from claims if a client holds you responsible for errors or you fail to perform as promised is:
The purpose of financial responsibility laws is to:
Which one of the following types of coverage would pay for damage to your automobile in an accident for which you were at fault?
Comprehensive physical damage coverage would cover financial losses due to:
Helen Granger borrowed her best friend's car and was in an accident. She was at fault. The car was totaled. What part of Helen's automobile insurance policy would cover the damage to her friend's car?
Approximately what percent of people who rent have purchased renter's insurance?
Which one of the following would be an example of a rating territory that helps determine insurance rates?
Which of the following plans is a hybrid that combines characteristics of both HMOs and PPOs?
To qualify for disability income under Social Security, you must be totally disabled for _____ months or more, and you must be unable to do any work.
________ is a type of major medical insurance that has a very low deductible amount and is offered without a separate basic plan.
A good health insurance plan should:
Medicare covers the cost of care in what countries besides the United States
Up to how many days of care in a skilled nursing facility are covered by Medicare?
The Affordable Health Act of 2010 requires new health plans to allow young people to remain on their parents' insurance policy until what age?
Which one of the following is a source of government health insurance that is administered by each state?
Jose Gonzales is purchasing disability income insurance. He should aim for a benefit amount that, when added to other income, will equal _____ percent of his gross pay.
By 2026, annual health care spending is expected to grow to almost _____percent of GDP.
People are more likely to lose their incomes due to _____ than death
Benjamin Northcutt has an insurance policy that does not cover cosmetic surgery like the nose job he would like to have. Which provision in his insurance policy would specify this?
Dean Thomas has an insurance policy that cannot be cancelled unless he fails to pay his premium when due. Which provision in his insurance policy would specify this?
Renee Carson's health insurance policy includes a $500 deductible and a coinsurance provision requiring her to pay 20 percent thereafter. Her medical bills total $7,000. What amount is she required to pay personally?
Good disability plans pay when you are
Sophie Bennett must pay $500 for doctor's visits each year before her insurance company will make any payments for doctor's visits. What is this requirement called?
Sophie Bennett is required to pay 20 percent of her medical costs after the deductible has been paid. What is this requirement called?
Which provision in a health insurance policy states that you will pay a flat dollar amount each time you receive a covered medical service?
A good health insurance plan should:
Raymond Carter has a type of all-inclusive health insurance that has a very low deductible and pays for hospital, surgical, medical, and other bills under one plan. What type of insurance does he have?
Nathan Drummond has three different insurance policies. He has been injured in an accident and has incurred $30,000 in medical bills. There is a provision in all of his insurance contracts that ensures the total benefits he receives from all sources is limited to 100% of allowable medical expenses. What is this provision called?
Sophie Bennett has personally paid a total of $6,000 in medical costs this year, which is the out-of-pocket limit listed in her insurance plan. At this point, there is a provision in her insurance contract that requires her insurance company to pay 100% of her medical costs for the remainder of the year. What provision is this likely to be?
Chris Jones has an insurance policy that pays benefits to him in cash when he is hospitalized. What type of insurance would this be?
Group health insurance plans comprise about _____ percent of all the health insurance issued by health and life insurance companies.
Marcia Fuller has an insurance policy that she and her three daughters, ages 5, 9, and 11, are entitled to benefits under. Which provision in her insurance policy is defined by this list of covered member?
Which one of the following provisions requires that the policyholder pay a basic amount before the policy benefits begin?
Darren Chase has an insurance policy that will only pay for a maximum of 60 days of hospitalization during a year. Which provision in his insurance policy would specify this?
Most group health insurance plans in the United States are sponsored by:
Which type of health insurance includes two features (a deductible provision and a coinsurance provision) to help keep the premium within the policyholder's means?
Which provision in a health insurance policy explains the circumstances under which the insurance company can end your health insurance policy?
Which health insurance plan directly employs or contracts with selected physicians to provide managed health care services in exchange for a fixed, prepaid monthly premium?
The waiting period in disability income insurance is called the ____________ period.
Which of the following requires large employers to provide health insurance coverage to all employees?
Taylor Jones has a life insurance policy that returns every cent she pays in premiums if she outlives the term of the policy. She knows this policy costs 30 to 50 percent more than a traditional policy but thinks it is worth it. What type of term life insurance does Taylor have?
Jerry Lewis is thinking about purchasing some life insurance. He goes to a company that is owned by shareholders. What type of life insurance company has he visited?
Which type of life insurance policy continues to grow in popularity, because the policyholder pays the same premium amount for the life of the policy?
Russell Lowe has a life insurance policy that allows him to change his premium without changing his coverage. He can also access his cash value with a policy loan or a withdrawal. What type of insurance does Russell likely have?
The insurance agent's rule of thumb that a typical family will need 70% of salary for seven years in order to adjust to the financial consequences of a wage-earner's death is known as which of the following estimation methods?
After you buy new life insurance, you have a "free look" period of ______ days.
Which statement is correct about whole life insurance?
One of the ten golden rules when buying life insurance is to
A plan that insures a large number of persons under the terms of a single policy without requiring medical examinations is called a ____________ life insurance policy.
If a provision for an accidental death benefit is attached to a whole life insurance policy, then this provision is referred to as a:
The Multiple of Income method of determining life insurance needs:
Richard Beck has a life insurance policy which he has modified to include an accidental death benefit payable to his son and daughter. This modification has most likely been done by attaching a(n) ____ to the policy.
John Camey has a life insurance policy that is tied to a separate stock fund. The cash value of his insurance policy depends on the yields earned in this fund and is not guaranteed. What type of life insurance does John likely have?
To obtain the insurance proceeds from a life insurance policy, who will have to send the policy and a copy of your death certificate to the life insurance company?
Which type of life insurance policy requires you to pay premiums for a stipulated period, usually 20 or 30 years, or until you reach a specified age?
Francesca Brown has a life insurance policy that provides her with protection for the next five years. However, she can get five more years of protection at the end of this term without having to have a medical examination because she will be less than 70 years old at that time. Her premiums will rise during each five-year period. What type of term life insurance does Francesca likely have?
Which type of life insurance policy provides coverage from the beginning of the contract to maturity and guarantees payment of a specified sum to the insured, even if he or she is still living at the end of the contract period?
Which of the following attributes would not be used by an underwriter to determine the appropriate premiums to charge for insurance?
The grace period normally allows ____________ days to elapse, during which time the premium may be paid on an insurance policy without penalty.
Tim Bridges has a life insurance policy where he makes payments of $325 per year until he reaches the age of 65. His policy is then "paid up" for life. His beneficiaries will receive the face value upon his death. What type of life insurance policy does Tim likely have?
Which of the following life insurance policies offers the greatest amount of coverage for the lowest initial premium and is a good choice for young families on a tight budget?
Fundamentally, group life insurance is ____________ insurance.
Cash-value policies may make sense for people who:
our annual income is $45,000. What is your life insurance need based on the easy method?
Which of the following does not refer to permanent insurance?
the premium for a whole life insurance policy remains constant:
The 2001 Mortality Table separates the mortality experience by:
Scott Carson wants to determine his life insurance needs. What method would identify his insurance needs as a range between five and ten times his annual income?
How many different types of life insurance companies are there?
Jim Brown has a life insurance policy that allows him to change his policy to fit his changing needs. He can change either the premium he pays or the period of coverage. What type of insurance does Jim likely have?
Which statement is correct regarding mutual life insurance companies?
Your annual income is $32,000. What is your life insurance need based on the easy method?
Your annual income is $90,000. You have a spouse, two kids, a dog and a mortgage - a typical family. What is your life insurance need based on the easy method?
Frank Keating has a life insurance policy that can be exchanged for a whole life policy without a medical examination. Once it has been exchanged, the premiums will increase. What type of term life insurance does Frank likely have?
Lori Simpson is thinking about purchasing some life insurance. She goes to a company where the policyholders are essentially the owners of the company. What type of life insurance company has she visited?
The most common type of permanent life insurance is called
A settlement option that provides for payment of the life insurance proceeds in equal periodic installments for a specified number of years after your death is called a:
Which one of the following statements correctly applies to term insurance?
The insurance agent's rule of thumb that a typical family will need 70% of salary for seven years in order to adjust to the financial consequences of a wage-earner's death is known as which of the following estimation methods?
The cash values of a variable life insurance policy increase at a constant rate over time.
With a variable life insurance policy, many people choose to supplement their retirement income by withdrawing some of the investment portion as an annuity to provide regular income.
Catherine Carey has made the choice to stay home and raise her three kids while her husband works. She wants to determine her insurance needs. What method was specifically designed for someone in her situation?
The easy method of determining life insurance needs is based on the rule of thumb that a "typical family" will need about what percent of a wage-earner's salary for seven years?
Richard Beck has a life insurance policy which he has modified to include an accidental death benefit payable to his son and daughter. This modification has most likely been done by attaching a(n) ________ to the policy.
In the 1950s, the life insurance industry developed:
An annuity is a financial contract written by an insurance company to provide you with a regular income.
Single persons living alone usually have little or no need for life insurance.
Which of the following life insurance policies offers the greatest amount of coverage for the lowest initial premium and is a good choice for young families on a tight budget?
Under the waiver of premium disability benefit provision, the company waives any premiums that are due after the onset of total and permanent disability.
The "family need" method of determining life insurance needs provides a thorough estimation of your life insurance needs.
Which type of life insurance policy continues to grow in popularity, because the policyholder pays the same premium amount for the life of the policy?
Which statement is correct about whole life insurance?
Francesca Brown has a life insurance policy that provides her with protection for the next five years. However, she can get five more years of protection at the end of this term without having to have a medical examination because she will be less than 70 years old at that time. Her premiums will rise during each five-year period. What type of term life insurance does Francesca likely have?
Renewable
Consumer awareness of life insurance has changed little over the years.
Subject to certain minimums, which life insurance, first introduced in 1979, has a minimum amount that must be paid to cover the insurance portion?
Russell Lowe has a life insurance policy that allows him to change his premium without changing his coverage. He can also access his cash value with a policy loan or a withdrawal. What type of insurance does Russell likely have?
Your annual income is $32,000. What is your life insurance need based on the easy method?
A special form of the limited payment plan is the ________ premium policy.
The coverage of term insurance ends at the conclusion of the term, but you can continue it if you have a renewability option.
One of the ten golden rules when buying life insurance is to:
Which is a correct statement about life insurance?
The policy loan provision permits you to borrow any amount up to the cash value of the policy.
Which of the following is false?
A life insurance policy puts a price on the life of the insured person.
If life insurance proceeds are left with the company, the company acts as trustee and pays the interest to the beneficiary.
After determining that you need life insurance, you should then:
Life insurance proceeds may be used to:
Before you buy life insurance, you should determine whether you really need life insurance.
Life insurance is one of the most important and expensive purchases you may ever make.
Which type of life insurance policy requires you to pay premiums for a stipulated period, usually 20 or 30 years, or until you reach a specified age?
Which of the following are common uses of life insurance proceeds?
The Multiple of Income method of determining life insurance needs:
Your life insurance policy is valuable only if it:
Under the Multiple of Income method of estimating life insurance needs, what important factor is excluded from the calculation?
The cash values of a ________ life insurance policy fluctuate according to the yields earned by a separate fund, which can be a stock fund, a money market fund, or a bond fund.
A beneficiary can be a spouse or child who:
Most American families face a substantial loss when one spouse dies unexpectedly.
Term insurance is a basic, "no frills" form of life insurance and is the best value for most consumers.
Credit life insurance policies for auto loans and home mortgages are usually the best buys for the protection they offer.
An important provision in every life insurance policy is the right to name your beneficiary.
How frequently does the premium for a whole life policy change during the insured's life?
Life insurance proceeds may be used to provide an education or income for children.
Life insurance proceeds may be used to provide a retirement income.
The premium for a whole life policy increases with your age.
Stock life insurance companies are owned by their policyholders.
Usually, there is no time limit on reinstatement of a lapsed life insurance policy.
Cash-value policies may make sense for people who:
Mutual companies issue only nonparticipating policies.
Your annual income is $90,000. You have a spouse, two kids, a dog and a mortgage - a typical family. What is your life insurance need based on the easy method?
How to Easy Method
The total debts of you and your spouse include the following: mortgage, $200,000; auto loan, $16,000; credit card balance, $2,000; and personal debts of $4,000. Further, you estimate that your funeral will cost $6,000. Your spouse expects to continue to work after your death. What is your life insurance need using the DINK method?
Using the "nonworking" spouse method, what should be the life insurance needs for a family whose youngest child is 8 years old?
Which of the following does not refer to permanent insurance?
Term insurance is protection for a specified period of time, usually:
Which type of life insurance is the least popular and its appeal continues to drop?
Who has the greatest need for life insurance?
Which type of insurance is sometimes called temporary life insurance?
A suicide clause means that the insurance company:
Life insurance is available from a wide range of private and public sources.
The policy loan provision permits you to borrow any amount up to the cash value of the policy.
Which type of life insurance policy combines term insurance with an investment option?
Lori Simpson is thinking about purchasing some life insurance. She goes to a company where the policyholders are essentially the owners of the company. What type of life insurance company has she visited?
Even though it is expensive, you should add the accidental death benefit to your life insurance policy, because your chances of dying in the exact manner stated in the policy are very high.
Using the Multiple of Income Method to estimate insurance needs, what amount of insurance is needed if your current income is $50,000?
Life insurance proceeds may be used to:
pay off a home mortgage.
Which is a correct statement about life insurance?
Individuals and families purchase life insurance primarily to:
The life expectancy of a female at the age of 30 is 52.0 years. It means that:
You probably have little or no need for life insurance if you are:
Your annual income is $45,000. What is your life insurance need based on the easy method?
Which method of determining life insurance needs is designed specifically for a working couple with no dependents?
Using the "nonworking" spouse method, what should be the life insurance needs for a family whose youngest child is 8 years old?
Your annual income is $90,000. You have a spouse, two kids, a dog and a mortgage - a typical family. What is your life insurance need based on the easy method?
Jeff Willis has five kids and a lot more debt than a typical family. What method would probably be the best method for him to use to calculate his insurance needs?
Most participating policies are sold by:
Which statement is correct regarding mutual life insurance companies?
Which statement is correct regarding stock life insurance companies?
Which type of insurance is sometimes called temporary life insurance?
The most common type of permanent life insurance is called:
Which statement is correct about whole life insurance?
The cash values of a ____________ life insurance policy fluctuate according to the yields earned by a separate fund, which can be a stock fund, a money market fund, or a bond fund.
Francesca Brown has a life insurance policy that provides her with protection for the next five years. However, she can get five more years of protection at the end of this term without having to have a medical examination because she will be less than 70 years old at that time. Her premiums will rise during each five-year period. What type of term life insurance does Francesca likely have?
Which of the following does not refer to permanent insurance?
Your life insurance policy is valuable only if it:
The grace period normally allows ____________ days to elapse, during which time the premium may be paid on an insurance policy without penalty.
If a provision for an accidental death benefit is attached to a whole life insurance policy, then this provision is referred to as a:
The prices of life insurance policies:
After you buy new life insurance, you have a "free look" period of ______ days.
Mutual companies issue only nonparticipating policies.
A rider is any document attached to the policy that modifies its coverage by adding or excluding specified conditions or altering its benefits.
The premium that is refunded to policyholders of a participating policy is called the policy dividend.
The financial strength of an insurance company may be a major factor in holding down premium costs for consumers.
Life insurance is available from a wide range of private and public sources.
A term insurance policy pays a benefit only if you die during the period that the policy covers
How frequently does the premium for a whole life policy change during the insured's life?
Which type of life insurance is the least popular and its appeal continues to drop?
Fundamentally, group life insurance is ________ insurance.
Using the multiple of income method to estimate life insurance needs, what is the minimum amount of insurance needed for Susan Smith if her annual income is $60,000?
Life insurance proceeds may be used to
How many different types of insurance companies are there?
Which of the following questions are important to consider when choosing an insurance agent?
Which insurance is sometimes called temporary life insurance?
Taylor Jones has a life insurance policy that returns every cent she pays in premiums if she outlives the term of the policy. She knows this policy costs 30 to 50 percent more than a traditional policy but thinks it is worth it. What type of term life insurance does Taylor have?
A method of evaluating the cost of life insurance by taking into account the time value of money combines all of the following except
Your annual income is $32,000. What is your life insurance need based on the easy method?
The purpose of insurance is to help protect you and your family against possible financial loss.
Risk management is an organized strategy for protecting and conserving assets and people.
Homeowner's insurance refers to coverage also available to condominium owners.
Personal belongings that have a high value can be protected with a personal property floater.
A household inventory helps to provide evidence of ownership and value of items covered by home insurance.
An umbrella policy provides additional personal liability coverage beyond the basic amounts in most homeowner policies.
Medical payments coverage in a home insurance policy is designed to pay for legal action taken against a homeowner who may be legally responsible for injury or property damage of others.
The comprehensive form (HO-5) of homeowner's insurance includes coverage for damage due to floods.
Replacement value for settling property insurance claims is less costly than the actual cash value method.
A home made of wood is more expensive to insure than a comparable brick structure.
The 100/300 amounts for bodily injury liability insurance refer to the costs of insurance coverage.
Medical payments coverage in an automobile insurance policy pays for the costs of injuries to persons in the driver's vehicle.
No-fault insurance systems have always reduced the time and costs involved in settling auto injury claims.
Property damage liability coverage would pay for damage to another vehicle for which you were at fault.
The driver classification category is based on automobile style, model, and value of the vehicle.
The purpose of an assigned risk pool is to assist people with poor driving records in obtaining automobile insurance coverage.
Peril is defined as:
Defective house wiring is an example of a:
The uncertainties of direct and indirect losses to personal or real property due to fire, wind, accidents, theft, and other hazards are called ____________ risks.
Possible losses due to negligence resulting in bodily injury or property damage to others are called ____________ risks.
Starting a small business that may or may not succeed is an example of ___________ risk.
Eating a balanced diet and exercising is an example of risk _____.
Wearing a seat belt in an automobile to protect yourself against the risk ofinjury in an automobile accident is an example of risk _____.
Which of the following would be covered by a home insurance policy?
The legal responsibility for the financial cost of another person's losses or injuries is referred to as:
If a homeowner leaves toys on stairs that results in injury to a delivery person, this may be ruled as:
Negligence refers to:
While cleaning your home, a worker damages some furniture. You take action against the worker's employer to cover the cost of the damage. This is an example of a ____________ liability.
High winds cause damage to trees, shrubs, and plants. This insurance claim would be covered under the ____________ component of homeowner's insurance.
The additional living expenses component of a homeowner’s insurance policy is designed to:
Which of the following is considered personal property for home insurance coverage?
Georgette Valentine has expensive photography equipment for use in her hobby. Which one of the following types of coverage would pay for damage or theft of this equipment?
The ____________ coverage of a home insurance policy would cover accidental damage to another person's property by a member of your family.
An umbrella policy is designed to cover:
Most home insurance policies provide coverage for minor accidental injuries on your property under:
Renter's insurance would include coverage for:
Which one of the following is not covered by renter's insurance?
Which form of a homeowner's policy expands coverage to include replacement cost on contents?
Kelly and Bob Walton recently purchased a new home and desire coverage for all causes of loss or damage except those specially excluded by the policy. They should obtain the ____________ form of homeowner's policy.
Your home insurance provides for replacement value for personal property losses. A microwave is stolen. It cost $300 two years ago and has an expected life of six years. A comparable microwave costs $400 today. What amount will the insurance company pay?
Which one of the following insurance policy provisions requires the insured to pay for part of the loss if the property is not insured for the specified percentage of replacement value?
The ____________ method to settle claims is based on the current replacement cost of a damaged or lost item less depreciation.
Home insurance rates are affected most directly by:
Your home insurance policy has a $250 deductible. If a small fire causes $600 damage to your home, what amount of the claim would the insurance company pay?
The purpose of financial responsibility laws is to:
____________ provides coverage for the risk of financial loss due to legal expenses, medical expenses, lost wages, and other expenses associated with injuries caused by an automobile accident for which you were responsible.
The 100 in 100/300/50 refers to:
Henry Edwards was injured in an accident caused by another driver who did not have insurance. Henry's medical expenses would be covered by:
Which one of the following coverages would pay for health care for friends who were injured in your automobile?
Which of the following is a system in which drivers involved in an accident collect medical expenses, lost wages, and related injury costs from their own insurance company?
____________ protects you against financial loss when your car damages other vehicles, street signs, or buildings.
The 25 in 50/100/25 refers to ____________ coverage.
Which one of the following types of coverage would pay for damage to your automobile in an accident for which you were at fault?
Comprehensive coverage would cover financial losses due to:
____________ coverage would pay for damage to your vehicle caused by an accident when another driver with insurance was legally at fault.
Thad Joslin was judged at fault in an automobile accident. Three others were awarded damages of $150,000, $75,000, and $75,000. Thad has 100/300 bodily injury liability coverage. What amount, if any, would not be covered by his insurance?
Your geographic location is a major factor in determining the ____________ used to calculate your automobile insurance premiums.
Wind damage occurs to your car costing $800 to repair. If you have a $100 deductible for collision and full coverage for comprehensive, what portion of the claim will the insurance company pay?
Which one of the following refers to a category based on the driver’s age, sex, marital status, and driving habits that is used to set automobile insurance premiums?
Which one of the following factors is used to determine a person's driver classification?
An assigned risk pool:
A system that requires each insurance company operating in a state to provide coverage to individuals who may have had many expensive claims is referred to as:
Tara Guest owns a home in Edmond, Oklahoma. She is worried about a tornado causing damage to her home. The tornado is an example of a:
Susan Bize owns a home in Edmond, Oklahoma. She has a coffee maker in the home that has been recalled because it is likely to start fires. The coffee maker is an example of a:
Joan Stone owns a home in Edmond, Oklahoma. She is worried her property might be damaged due to some unforeseen event. This worry about the uncertainty as to a loss is an example of a:
Nick Wilson owns a home in Edmond, Oklahoma and pays $665 per year in insurance on the home. The $665 fee is an example of a:
Kevin Brown rides his bicycle to work so that he does not have to worry about getting in a car accident. How is Kevin managing his risk?
Larry Foster has bought a car with extra safety features, including front and side airbags and antilock brakes. How is Larry managing his risk?
Peter Jacobs has set aside $5,000 in case he has an accident in his 1999 Honda Civic. He does not have collision insurance on this car. How is Peter managing his risk?
Robert Plant pays a premium each month to State Farm Insurance for automobile insurance on his 2012 Dodge Ram pick-up truck. How is Robert managing his risk?
Zachary Harris owns a home in Elk City. There was a bad thunderstorm and his gazebo was hit by lightening and burned to the ground. What part of his homeowner's insurance policy would cover this loss?
William Bennett owns a home in Tampa, Florida. There was a fire in his home and he and his family had to move to a hotel until his home could be fixed. What part of his homeowner's insurance policy would cover the cost of the hotel?
Albert Finney owns a home in Pompano Beach, Florida. His house is broken into and the burglar steals his computer, his big screen TV, his stereo equipment, and his toaster. What part of his homeowner's insurance would cover this loss?
Brett Johnson owns a home in Yukon, Oklahoma. A babysitter he hires breaks her leg when she trips over the dog. What part of his homeowner's insurance would cover this loss?
Craig Brown owns a home in San Francisco, California. There is a major earthquake and his house is damaged by the earthquake. What type of insurance would he have to have to cover this loss?
David Bowers must show a card from his automobile insurance company when he registers his car in the state of Oklahoma each year to show financial responsibility. Which of the following types of laws is the reason he must show this card each year?
Evan McWilliams accidentally collided with a car driven by Francis Sullivan. It was Evan's fault and Francis was seriously injured and had to spend the night in the hospital. What part of Evan's automobile insurance policy would cover Francis's injuries?
Ginger Simpson ran off the road and hit a bridge support. She was seriously injured and spent three days in the hospital. What part of Ginger's automobile insurance policy would cover Ginger's injuries?
Hermione Granger borrowed her best friend's car and was in an accident. She was at fault. The car was totaled. What part of Hermione's automobile insurance policy would cover the damage to her friend's car?
Georgia Owen was in an accident in which her car was totaled. What part of Georgia's automobile insurance would cover the damage to her car?
Kyle Burroughs left his car parked on the street all night. When he came out in the morning all four of his tires had been slashed by vandals. What part of Kyle's automobile insurance would cover this damage?
Which one of the following would be an example of the driver classification category that helps determine insurance rates?
Which one of the following would be an example of a rating territory that helps determine insurance rates?
Which of the following might qualify Amy Farmer for a premium discount on her automobile insurance?
Which one of the following would not be considered personal property by a homeowner's insurance policy?
Your home insurance policy has a $500 deductible. If a windstorm causes $2,000 damage to your home, what amount of the claim would the insurance company pay?
What type of coverage in a home insurance policy is designed to pay for legal action taken against a homeowner who may be legally responsible for injury or property damage of others?
The 500 in 200/500/50 refers to:
Personal risks, property risks, and liability risks are types of ________ risk.
A parent may be held responsible for the actions of their child if those actions cause financial or physical harm to others. This is known as:
Which of the following would not be considered personal property under a typical homeowner's insurance policy?
_________ coverage protects your automobile from risks such as glass breakage, falling objects, vandalism, or damage caused by hitting an animal.
Which of the following is not something you should do when you are involved in an automobile accident?
What type of personal liability coverage is also called a personal catastrophe policy?
Personal risks are the uncertainties surrounding the loss of income or life due to all except:
Another term for liability coverage that protects you from claims if a client holds you responsible for errors or you fail to perform as promised is:
Fewer than what percent of people who live in flood-prone areas have flood insurance?
Approximately what percent of people who rent have purchased renter's insurance?
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Self-insurance is part of:
Property owners face potential property losses due to two risks, physical damage and:
Additional personal liability insurance beyond the basic coverage in a homeowner’s policy is available with:
Most insurance policies include deductibles, which are a combination of risk assumption and:
Which statement is not true about no-fault insurance systems?
The most common method of dealing with risk is to:
Which of the following refers to the process of establishing a monetary fund that can be used to cover the cost of a loss?
Property owners face loss of use risk due to:
Uninsurable risks are considered _____ risk.
Which of the following is a list of personal belongings with purchase dates and cost information?
Which of the following is aninsurer that agrees to assume financial responsibility for losses that may result from an insured risk?
Which of the following is an insurable risk?
Risk management is an organized strategy for protecting assets and people and is considered a _____.
What is the #1 natural disaster in the United States?
Homeowners can obtain $10,000 coverage for sewage and drain backup damage for approximately:
The United States has the lowest per capita medical expenditures of any industrialized country in the world.
Affordable health care has become one of the most important social issues of our time.
One reason for the high cost of health care is the use of sophisticated and expensive technologies.
The best way to avoid the high cost of illness is to stay well.
The prescription to stay healthy includes getting sufficient rest, relaxation, and exercise.
Health club membership is a form of protection to alleviate the financial burdens individuals suffer from illness or injury.
Group health insurance will cover you, but not your immediate family.
Individual health insurance covers either one person or a family.
Very few group health insurance policy contracts have a coordination of benefits provision.
A good health insurance plan should offer basic coverage for hospital and doctor bills.
A good health insurance plan should impose no unreasonable exclusions.
More people have hospital insurance than any other kind of health insurance.
People often buy surgical expense insurance in combination with hospital expense insurance.
Physician expense insurance coverage excludes visits to the doctor's office, x-rays, and lab tests.
Basic health insurance coverage includes hospital expense insurance, surgical expense insurance, and physician expense insurance.
A deductible provision requires the policyholder to pay a basic amount before the policy benefits begin.
Hospital expense insurance pays part or the full amount of hospital bills for room, board, and other charges.
Surgical expense insurance pays part or the full amount of the surgeon's fees for an operation.
Physician expense insurance helps pay for physician's care that does not involve surgery.
A recent study by Americans for Long-Term Care Security found that one out of five Americans over age 30 is at risk of needing some form of long-term care within the next 12 months.
A coinsurance provision requires the policyholder to share the expenses beyond the deductible amount.
A stop-loss provision requires the policyholder to pay up to a certain amount, after which the insurance company pays 100 percent of all remaining covered expenses.
A hospital indemnity policy pays benefits directly to the hospital only when you are hospitalized.
The hospital indemnity policy is a good substitute for basic or major medical protection.
Dread disease and cancer policies are usually very good values.
Long-term care insurance was virtually unknown 50 years ago, but it is now growing faster than any other form of insurance.
Blue Cross plans provide for surgical and medical services performed by physicians.
Blue Shield plans provide hospital care benefits on essentially a "service type" basis.
Preferred provider organizations combine the best elements of the fee-for-service and HMO systems.
Part A of Medicare pays for all covered services for inpatient hospital care after you pay a single annual deductible.
Medigap insurance, intended to supplement Medicare, is sold and serviced by the federal government.
Medicaid is administered by each state within certain broad federal requirements and guidelines.
Medicare does not cover the medical expenses of private-duty nursing care.
Two sources of government health insurance are Medicare and Medicaid.
Medicare originally had two parts: hospital insurance and medical insurance.
Medicare hospital insurance is financed from a portion of the Social Security tax.
To get Medicare medical insurance, you must sign up for it and pay a monthly premium.
Care in a skilled nursing facility beyond 100 days per benefit period is approved and covered by Medicare.
Medicare covers routine checkups, dental care, most immunizations, cosmetic surgery, routine foot care, eyeglasses, and hearing aids.
Medicare covers the cost of care received outside the United States, Canada, and Mexico.
Medicare was never intended to pay all medical costs.
Medicare supplement insurance is a government-sponsored program.
Title XIX of the Social Security Act provides for a program of medical assistance to certain low-income individuals and families.
Medicaid is financed by both state and federal funds.
Very few members of the Medicaid population are also covered by Medicare.
Medicaid differs from Medicare because eligibility for Medicaid depends on having very low income and assets.
Because Medicaid coverage is very limited, people using it need to purchase supplemental insurance.
Disability income insurance provides regular cash income lost by employees as the result of an accident or illness.
Once a person is eligible, Medicaid provides more benefits than does Medicare.
Disability income insurance is probably the least neglected form of available insurance protection.
Every year, 40% of the adult U.S. population suffers a long-term disability.
Good disability plans pay when you are unable to work at your regular job; poor disability plans pay only when you are unable to work at any job.
Disability benefits begin on the first day you are disabled.
Generally, disability income policies with shorter waiting periods have lower premiums.
You should seek a disability policy that pays benefits for life.
You should look for a disability income policy that waives premium payments while you are disabled.
The premium for noncancelable and guaranteed renewable coverage is higher, but the coverages are well worth the extra cost.
Many employers provide disability income protection for their employees through group insurance plans.
Unfortunately, most salaried workers in the United States do not participate in Social Security programs.
The affordability of health care is one of the most important _____ issues of our time?
Which country has the highest per capita medical expenditures of any industrialized country in the world?
Which of the following groups has undertaken innovative activities to contain the costs of health care?
Which of the following is an innovative way concerned groups are containing health care costs?
What are some possible reasons for high and rising costs of health care?
What can you do to responsibly reduce your personal health care costs?
Most group health insurance plans in the United States are sponsored by:
Which type of health insurance plan may not cover all of your health insurance needs and may deny benefits if you lose your job?
Harry Mayhue gets a bad case of the flu and ends up in the hospital for three days. Which part of his basic health insurance coverage should help pay for this stay?
Joe Johnson needs surgery for appendicitis. Which part of his basic health insurance coverage should help pay for the surgeon’s fees?
Julie Cumbie was playing softball and got hurt sliding into second base. She gets an x-ray at her doctor's office to make sure her ankle isn't broken. Which part of her basic health insurance coverage should help pay for this x-ray?
Jamal Walker developed a serious infection and spent 6 months in his hospital's intensive care unit. What part of his health insurance policy would be the most useful for helping to pay for this?
Nathanial Drummond has three different insurance policies. He has been injured in an accident and has incurred $30,000 in medical bills. There is a provision in all of his insurance contracts that ensures the total benefits he receives from all sources is limited to 100% of allowable medical expenses. What is this provision called?
Each year, Sophie Bennett must pay $500 for doctor's visits before her insurance company will make any payments for doctor's visits. What is this requirement called?
Sophie Bennett is required to pay 20 percent of her medical costs after the deductible has been paid. What is this requirement called?
Sophie Bennett has personally paid a total of $5,000 in medical costs this year, which is the out-of-pocket limit listed in her insurance plan. At this point, there is a provision in her insurance contract that requires her insurance company to pay 100% of her medical costs for the remainder of the year. What provision is this likely to be?
Raymond Carter has a type of all-inclusive health insurance that has a very low deductible and pays for hospital, surgical, medical, and other bills under one plan. What type of insurance does he have?
Chris Jones has an insurance policy that pays benefits in cash when he is hospitalized. What type of insurance would this be?
Karen Blumenthall was seriously injured in a car accident and is paralyzed from the waist down. Luckily, she has an insurance policy that will pay for someone to come in and help with her daily activities such as bathing, dressing, and household chores. What type of insurance policy is this likely to be?
Joan Wilder receives a phone call from a salesperson who tries to sell her an insurance policy by scaring her about her high risk of death from this disease. She knows that this type of insurance policy is notoriously a poor value, so she politely declines. What type of insurance policy did this salesperson likely try to sell her?
Which provision in a health insurance policy states that you will pay a flat dollar amount each time you receive a covered medical service?
Marcia Fuller has an insurance policy that she and her three daughters, ages 6, 10, and 12, are entitled to benefits under. Which provision in her insurance policy is defined by this list of covered members?
Dean Thomas has an insurance policy that cannot be cancelled unless he fails to pay his premium when due. Which provision in his insurance policy would specify this?
Darren Chase has an insurance policy that will only pay for a maximum of 60 days of hospitalization during a year. Which provision in his insurance policy would specify this?
Benjamin Northcutt has an insurance policy that does not cover cosmetic surgery like the nose job he would like to have. Which provision in his insurance policy would specify this?
A good health insurance plan should:
Which type of insurance is usually bought in combination with hospital and surgical insurance?
Which type of health insurance includes two features (a deductible provision and a coinsurance provision), which help keep the premium within the policyholder’s means?
A good health insurance plan should:
Which one of the following provisions requires that the policyholder pay a basic amount before the policy benefits begin?
____________ is a type of major medical insurance that has a very low deductible amount and is offered without a separate basic plan.
Which health insurance policy pays benefits only when you are hospitalized, but pays these benefits in cash which you can use for medical, nonmedical, or supplementary expenses?
Dental expense insurance provides reimbursement for:
According to your textbook, the average benefit paid under supplemental hospital indemnity plans:
Which type of health insurance is a poor value?
Which of the following statements is not true?
Which one of the following would be your best selection if you could only choose one of the following types of insurance?
Which type of insurance protects "your ability to earn income?"
Health insurance is not available from:
Which one of the following is not a provider of health insurance?
Most private insurance companies sell health insurance policies to:
Which health insurance plan directly employs or contracts with selected medical care specialists to provide managed health care services in exchange for a fixed, prepaid monthly premium?
Hospital insurance and medical insurance are characteristics of:
Which medical expense is covered by Medicare?
Medigap is sold or serviced by:
Which one of the following is a correct statement about the administrative costs of the health care system in the U.S.?
Which one of the following is a source of government health insurance?
Which one of the following is a source of government health insurance that is administered by each state?
Hospital insurance is which part of Medicare?
Medical insurance is which part of Medicare?
The hospital insurance portion of Medicare helps pay for:
Medicare medical insurance helps pay for:
Medicare medical insurance is:
Which of the following statements is not correct about Medicaid?
Because you feel young and healthy now, you may overlook the very real need for which type of insurance?
The definition of disability:
Good disability plans pay when you are:
With disability income insurance, benefits usually begin:
The waiting period in disability income insurance is called the ____________ period.
Generally, disability income policies with longer waiting periods:
In most employer-sponsored disability income insurance plans:
Most insurers limit disability benefits from all sources of insurance to no more than ____________ percent of your take-home pay.
John Gleason is permanently disabled while on the job. Which of the following is the most likely source of disability income for John?
Which one of the following is true regarding group health insurance?
Which of the following is not a way that you can reduce your personal health care costs?
What should you do when an HMO denies treatment or coverage?
Which of the following is not a key provision of the Patient Protection and Affordable Care Act of 2010?
Renee Crowgy's health insurance policy includes a $500 deductible and a coinsurance provision requiring her to pay 20 percent thereafter. Her medical bills total $5,500. What amount is she required to pay personally?
The Affordable Health Act of 2010 requires new health plans to allow young people to remain on their parents' insurance policy until what age?
Every year, what percent of the adult U.S. population suffers a long-term disability?
As a national average, a year in a nursing home can cost over:
Physician expense insurance coverage excludes which of the following:
Up to how many days of care in a skilled nursing facility are covered by Medicare?
Medicare covers the cost of care in what countries besides the United States?
According to The Center for Medicare and Medicaid Services, health insurance includes both medical expense insurance and:
Group health insurance plans comprise about _____ percent of all the health insurance issued by health and life insurance companies.
A sign that your group health coverage needs supplementing would be:
Which of the following factors has not contributed to rising health costs?
In the U.S., administrative costs consume nearly _____ percent of health care dollars.
If your employer pays the premium for long-term care, then the _________ treats it as a tax-deductible expense for the employer.
Which of the following is not listed in your book as offering group health insurance plans?
Which type of health insurance covers diagnosing and treating glaucoma, eyeglasses, and eye surgery?
Which provision in a health insurance policy prevents you from collecting benefits from two or more group policies that would in total exceed the actual charges?
Which provision in a health insurance policy explains the circumstances under which the insurance company can end your health insurance policy?
If you are 35 years old now, your chances of experiencing a three-month or longer disability before you reach age 65 are _____percent, according to the National Association of Insurance Commissioners.
To qualify for disability income under Social Security, you must be totally disabled for _____ months or more, and you must be unable to do any work.
Jose Gonzales is purchasing disability income insurance. He should aim for a benefit amount that, when added to other income, will equal _____ percent of his gross pay.
Which of the following is not a source of disability income?
People are more likely to lose their incomes due to _____ than death.
According to the Government Accountability Office, fraud and abuse account for nearly _____ percent of all dollars spent on health care.
By 2024, annual health care spending is expected to grow to almost _____percent of GDP.
Which of the following requires large employers to provide health insurance coverage to all employees?
A recent industry survey estimated that _____ percent of employed Americans are enrolled in some form of managed care.
Which of the following plans is a hybrid that combines characteristics of both HMOs and PPOs?
The Wilson family has health insurance coverage that pays 50 percent of out-of-hospital expenses after a $1,000 deductible per person. Mrs. Wilson incurred doctor and prescription medication expenses of $3,650. What amount would the insurance company pay and what amount will the Wilson family pay?
Jacob, an assembly line worker at a motorcycle manufacturing plant, has take-home pay of $1,000 a week. He is injured in an accident that kept him off work for 14 weeks. His disability insurance coverage replaces 60 percent of his earnings after a six-week waiting period. What total amount would he receive in disability benefits?
