Deck 10: Insurance: Covering Your Assets

Question 1

What does your medical insurance company pay if you purchase a $100 prescription and have a $25 co-payment plus 20% coinsurance policy?

A)$25
B)$40
C)$45
D)$60

Answer 1

$60

Question 2

An independent insurance agent can sell you insurance:

A)from only one company.
B)from any company she represents.
C)only on your automobile.
D)at a cheaper rate than if you were to purchase insurance online.

Answer 2

from any company she represents.

Question 3

What type of insurance covers you,your passengers,and your vehicle if you are in an accident that is not your fault?

A)The at-fault driver's insurance
B)Your uninsured/underinsured motorist insurance
C)Your liability insurance
D)Both the at-fault driver's insurance AND your uninsured/underinsured motorist insurance

Answer 3

Both the at-fault driver's insurance AND your uninsured/underinsured motorist insurance

Question 4

What amount does the insurance company pay for a $150 clinic visit if you have a $10 copayment?

A)$10
B)$15
C)$25
D)$140

Question 5

You back out of your driveway and hit your neighbor's car.What type of auto insurance must you have in order to get your neighbor's car repaired?

A)Liability
B)Collision
C)Comprehensive
D)Uninsured motorist

Question 6

If you are at fault in an auto accident and your passenger sustains injuries and is required to go to a hospital for treatment,what type of insurance will cover those expenses?

A)Liability (C2)
B)Collision
C)Comprehensive
D)Health

Question 7

You are driving on a back country road and hit a deer.What type of auto insurance must you have in order to get your car repaired?

A)Liability
B)Collision
C)Comprehensive
D)Uninsured motorist

Question 8

When borrowing money for a vehicle,who is typically the lien holder and loss payee on the insurance?

A)The primary driver of the car
B)The owner as noted on the title of the vehicle
C)The lending financial institution
D)The payer of the insurance

Question 9

Who regulates insurance companies?

A)Fair Trade Board
B)Commissioner of Trade
C)Federal Insurance Commissioner
D)State Insurance Commissioner

Question 10

Your car is hit by a motorist who stole a car and then took off.Your car is totalled,and you,luckily,escape with only minor injuries.What type of auto insurance must you have in order to get your car repaired?

A)Liability
B)Collision
C)Comprehensive
D)Uninsured motorist/underinsured motorist

Question 11

What is the NAIC?

A)North American Insurance Commissioners
B)North American Investment Council
C)National Association of Insurance Commissioners
D)National Association of Investment Council

Question 12

You back out of your driveway and hit your neighbor's car.What type of auto insurance must you have in order to get your car repaired?

A)Liability
B)Collision
C)Comprehensive
D)Uninsured motorist

Question 13

What amount does the insurance company pay for a $250 prescription if you have a $30 copayment plus 15% coinsurance policy?

A)$66
B)$56
C)$127
D)$187

Question 14

Which of these factors contributes to the calculation of auto insurance premiums?

A)Credit history
B)Driving record
C)Both credit history and driving record
D)Gas mileage over the last month

Question 15

How do independent agents differ from company insurance agents?

A)Company insurance agents may represent a single company provider who sells insurance from many companies.
B)Independent insurance agents represent more than one insurance company and can sell insurance from a wide range of insurance companies.
C)There is no difference between an independent and company insurance agent.
D)Independent insurance agents represent one insurance company.

Question 16

Why do you need to purchase insurance?

A)To cover your assets
B)To protect your personal wealth
C)To limit your liability
D)All options are correct

Question 17

Your insurance deductible is

A)the amount you have to pay if you make an insurance claim.
B)the cost of insurance that is deducted from your paycheck.
C)the maximum the insurance company will pay.
D)a fee the insurance company charges.

Question 18

The insurance declaration page states

A)the cost of insurance.
B)the maximum an insurance company will pay.
C)who is not covered under the policy.
D)All options are correct.

Question 19

What is the difference between liability and full coverage auto insurance?

A)Liability insurance only covers the driver's legal responsibilities if they are at fault in an accident.
B)Full coverage includes liability plus comprehensive coverage but not collision insurance.
C)Liability,in general,costs more than full coverage.
D)You are required by law to have full coverage until you are age 21.

Question 20

What is your out-of-pocket cost for a $150 clinic visit if you have a $10 copayment policy?

A)$10
B)$15
C)$25
D)$140

Question 21

The insured value of your home is usually less than the market price because

A)homeowner's insurance only covers the value of the buildings and structures and not the value of the land.
B)your home depreciates over time and is not worth the market price.
C)of the housing crisis of 2008.
D)of the 2009 recession.

Question 22

Flood insurance is

A)automatically included in your homeowner's insurance policy.
B)only required if you live near a river.
C)not important if I live in the 500-year flood plain.
D)purchased from the National Flood Insurance Program.

Question 23

What is the coverage of a 20/40/15 policy?

A)$20,000 for personal property liability/$40,000 bodily injury liability for all people injured in an accident/$15,000 for additional auto liability
B)$20,000 for personal property liability/$40,000 bodily injury liability for all people injured in an accident/$15,000 car rental rider
C)$20,000 for bodily injury liability for one person in an accident/$40,000 bodily injury liability for all people injured in an accident/$15,000 personal property liability
D)$20,000 for uninsured coverage/$40,000 bodily injury liability for all people injured in an accident/$15,000 personal property liability

Question 24

A health insurance deductible is

A)the portion of health expenses that you pay as you use medical services.
B)the amount taken out of your paycheck for health insurance.
C)the discount your insurance has negotiated with your health care provider.
D)The amount the government takes out of your paycheck for health care.

Question 25

What type of insurance does not cover your personal property?

A)Homeowner's
B)Renter's
C)Comprehensive
D)Health

Question 26

Minimum automobile liability insurance is

A)not something you need,but is a suggested amount of coverage.
B)Is the same in every state.
C)Is different in every state.
D)Is sufficient to cover your legal responsibilities if you cause an accident.

Question 27

A health insurance premium is:

A)top quality coverage.
B)coverage of specialty care.
C)an amount paid for health insurance coverage.
D)coverage for elective health care.

Question 28

What is the purpose of an umbrella insurance policy?

A)To protect your assets in the event of a liability lawsuit and if you reach your liability limits on your other policies
B)To protect your assets in the event of a flood or storm damage
C)To protect your assets in the event of water damage
D)To shield your property from hail damage

Question 29

What is the difference between replacement value and actual value for personal property insurance?

A)Actual value is the cost to replace an item.
B)Replacement value is the amount you could get for selling the item at a garage sale.
C)Replacement value is typically the current retail cost to replace the item.
D)Actual value is typically greater than replacement value.

Question 30

When purchasing homeowner's or renter's insurance,replacement value

A)only reimburses you for the amount originally spent to acquire personal property.
B)costs less than purchase price insurance.
C)will reimburse you for the amount required to replace your personal property at today's values.
D)will give you money to replace the property up to the value insured.

Question 31

Which is not a health insurance option type?

A)Fee-for-service
B)High deductible
C)Managed care
D)Emergent care

Question 32

Umbrella liability insurance coverage

A)provides additional liability coverage above your homeowner's and auto policies.
B)is unaffordable for many people.
C)covers you on a rainy day.
D)is just for the wealthy.

Question 33

Which risk does your homeowner's insurance usually cover?

A)Volcanic eruptions
B)Flood
C)Earthquake
D)All of the options are correct.

Question 34

How does COBRA help you?

A)It extends health insurance for a period of time after a job loss,death,divorce,or other life-changing event.
B)It is a rider on your health insurance.
C)It is a government agency that helps fight insurance companies that refuse to pay clients' claims or deny payment for medically-needed procedures.
D)It covers your deductible.

Question 35

What is the maximum amount of coverage of a 20/40/15 policy?

A)$75,000
B)$55,000
C)$40,000
D)$35,000

Question 36

Insurance riders

A)cover passengers in your automobile.
B)are additional insurance to protect specific items of value not covered on your primary policy.
C)are extremely expensive and not worth getting.
D)provide protection when dealing with the underinsured.

Question 37

SR-22 liability insurance is

A)required by the state if you are classified as a high-risk driver.
B)issued by the state.
C)only required if you are cited for driving under the influence.
D)only required if you own a car.

Question 38

With health insurance,the co-payment is

A)the amount you must pay before insurance pays.
B)not counted against your out-of-pocket maximum.
C)included in your premium.
D)covered under Medicaid.

Question 39

A home inventory

A)helps you recall your personal possessions in case of fire,theft,or destroyed property.
B)should be documented with video or photographs.
C)should be kept in a secure,off-site location.
D)All of the options are correct.

Question 40

What is the primary reason you should maintain a home inventory?

A)It serves as an annual accounting of assets.
B)You can use it to calculate net worth.
C)It can ease the process of filing a report or claim of stolen or damaged property.
D)It can help you budget your insurance needs.

Question 41

Medicare is

A)for those with limited income.
B)for health care expenses for people age 65 and older.
C)a government program that covers all medical expenses.
D)a program that has multiple avenues of access.

Question 42

A power of attorney and living will

A)provide an outline of which legal counsel takes over in event there are legal issues with your health care.
B)specify who can change your will while you are alive.
C)specify who has the power to contact your attorney and change your will.
D)provide specific instructions to direct your medical care in the event that you are unable to do so in the future.

Question 43

Disability insurance

A)pays 100% of your salary if you are hurt and have to miss work.
B)starts immediately when you are injured.
C)usually has a waiting period before you can make a claim.
D)is only offered by your employer or the government.

Question 44

In what life stage are you likely to need the most life insurance coverage?

A)Dependent
B)Independent
C)Early family
D)Empty nest

Question 45

When is the best time to buy long-term care insurance?

A)When you get your first full-time job
B)In your mid-40s
C)In your mid-50s
D)Upon retirement

Question 46

Insurance provides a way to build assets in the event of a catastrophe or accident.

Question 47

Which of the following is not a characteristic of permanent life insurance?

A)It builds cash value.
B)It is known as whole life,universal life,and variable life.
C)It provides you with a fixed amount of insurance.
D)It is the cheapest form of pure life insurance protection.

Question 48

Which of the following is a downside of term life insurance?

A)Premiums can remain the same for a specific period.
B)It is the cheapest form of life insurance you can purchase.
C)It may include the option to renew.
D)It can be outlived.

Question 49

The insurance declaration page focuses on what items are excluded from coverage.

Question 50

Whole life insurance

A)benefits you after you die.
B)helps support those that depend on your income after you die.
C)costs the same for everyone.
D)needs do not change over time.

Question 51

COBRA

A)allows you to keep health insurance for a limited time under your employer's health insurance plan even if you no longer work there.
B)is paid by the employer.
C)is not available to students after they graduate from college.
D)is covered under Medicaid.

Question 52

Which of the following is not a type of life insurance?

A)Term life insurance
B)Mid-term life insurance
C)Whole life insurance
D)Universal life insurance

Question 53

The declaration page of an insurance policy includes the names of the insured,the property insured (with vehicles this includes the make,model,year,and vehicle identification number,or VIN),the effective dates,the coverage type and limits,the deductible,and the policy premium amount.

Question 54

Insurance cannot be purchased online.

Question 55

You have a co-pay of $50.00 per clinic visit and a maximum out-of-pocket expense of $500.How many times can you visit the doctor this year before you no longer have to make the copayment?

A)5
B)10
C)50
D)100

Question 56

How does whole life differ from universal life insurance?

A)Universal life is similar to whole life except it does not have a guaranteed minimum return.
B)They are similar except universal life covers all family members.
C)Universal life serves as an umbrella policy if you are killed in an auto accident.
D)Whole life must be purchased before the age of 50.

Question 57

An insurance premium is based on the risk that you will file a claim against the insurance company.

Question 58

If you should become disabled,what are some options you can take to remain secure during the waiting period before being able to file a claim on your disability insurance?

A)Accrue sick leave to cover missing income
B)Accrue vacation to cover missing income
C)Save enough income in an emergency fund to cover missing income
D)All options are correct.

Question 59

A health maintenance organization (HMO)

A)has a greater selection of doctors than a preferred provider organization (PPO).
B)is more expensive than a PPO.
C)provides less flexibility in selecting doctors than a PPO.
D)has a deductible for out-of-network expenses.

Question 60

Which of the following is not something that can help contain the cost of long-term care insurance?

A)Buy a policy with a longer waiting period before benefits begin.
B)Save enough money to pay for care during the time when you are not receiving benefits.
C)Consider buying a joint policy for yourself and your spouse.
D)Consider a long-term care plan with a shorter waiting period before benefits begin.

Question 61

In an accident where you are at fault,liability insurance covers only the repairs on the other vehicle.

Question 62

The Consolidation Omnibus Budget Reconciliation Act (COBRA)allows students to extend coverage under their parents' policy for up to three years.

Question 63

Health insurance plans fall into three categories: fee-for-service,high-deductible,and managed care.

Question 64

If you purchase a homeowner's policy with guaranteed replacement cost or an extended replacement cost,your personal property will be replaced even if it costs more than policy limits.

Question 65

If the vehicle is damaged,the loss payee is notified and payment is made to the payer of the insurance policy.

Question 66

Auto insurance premiums can be impacted by whether or not an auto has air bags and antilock brakes.

Question 67

Homeowner's insurance generally does not cover earthquakes or floods.

Question 68

An auto loan lender will require that you have full coverage insurance,naming the financial institution as lien holder and loss payee.

Question 69

People can sue for many reasons,and an umbrella policy covers your assets in the event of a liability lawsuit and if liability limits are reached on other policies.

Question 70

Comprehensive and collision insurance do not cover repairs on your own car if you are at fault.

Question 71

Full coverage consists of comprehensive and collision insurance and protects you and the vehicle regardless of fault or if the other driver has no insurance.

Question 72

Having a living will in place is all that is required to protect your family's assets.

Question 73

If you have too many serious driving violations,your state may require that you have SR-22 liability insurance in order to drive.

Question 74

Liability insurance on a vehicle is broken down into two different categories.

Question 75

Federal privacy laws limit what the care provider/care facility can share without your permission.

Question 76

Health insurance requires a basic understanding of monthly premiums,deductibles,copayments,coinsurance,and exclusions.

Question 77

The driving force behind managed care (PPO,HMO,and POS)is to improve health care outcomes.

Question 78

A homeowner's or renter's insurance policy usually contains liability insurance for accidents that occur there to safeguard you if someone else should be hurt on your property.

Question 79

You can only purchase insurance through an insurance agent who is licensed in your state.

Question 80

An insurance rider should be considered for jewelry,antiques,coins,or other collectibles that are kept in your home even if your home is insured.