Deck 10: Protecting Your Wealth - Health and Life Insurance

Question 1

Most people obtain health insurance through group plans offered by employers.

Answer 1

True

Question 2

Technological advances are one of the things helping to keep the cost of health care from escalating further.

Answer 2

False

Question 3

Usually plans such as dental insurance and vision insurance are good deals if they are offered through employers.

Answer 3

True

Question 4

Basic health insurance policies will not cover stays in nursing homes or assisted living centres for very long.

Question 5

Health insurance protects net worth by minimizing the chance that you will have to reduce savings or incur debt when you require medical attention.

Question 6

Since most workers have employer-sponsored disability coverage and are also eligible for CPP and worker's compensation, there is very little demand or need for individual disability insurance.

Question 7

Policy premiums for long-term care insurance are relatively low, even for those over 60 years old.

Question 8

CPP is a government health insurance program for those over 65 years of age who can show need for financial assistance.

Question 9

The best disability plans pay you if you are not able to work at any job, not just your regular job.

Question 10

The Canada Pension Plan is the easiest disability coverage to qualify for benefits.

Question 11

The federal government ensures that all provinces have exactly the same medical coverage.

Question 12

Generally, disability income policies with shorter waiting periods have lower premiums.

Question 13

Private health insurance plans contain hospital insurance, physician insurance, and surgical insurance.

Question 14

A 30 percent coinsurance payment means that you will pay $300 on a $1500 dental bill.

Question 15

Buying health insurance through employer-sponsored plans is somewhat more expensive than buying your own policy individually.

Question 16

Hospitals, doctors, and patients have enough incentive to make the most economical use of health care services.

Question 17

Most private health care coverage is provided by employers.

Question 18

The Canada Health Act dictates that the provinces keep minimum universal standards of health care coverage.

Question 19

One of the problems with changing jobs is that you will immediately lose your health insurance and may not be able to get new insurance right away.

Question 20

Private health insurance companies replace coverage provided by the provinces.

Question 21

CPP and EI disability benefits are taxable income.

Question 22

Employer-insured disability income replacement benefits are taxable.

Question 23

Own occupation disability is the cheapest type of coverage.

Question 24

Disability insurance payments will be reduced if you find work elsewhere.

Question 25

An "any occupation" clause in disability coverage means that you may have to find work as a file clerk even though you are a trained accountant.

Question 26

Life insurance is critical to protect a family's financial situation in the event that a breadwinner dies.

Question 27

Age has no effect on the premiums charged for long-term care policies.

Question 28

CPP has a disability option that will cover you if you are partially disabled.

Question 29

To collect the benefits from a critical illness insurance policy, you must be able to survive a life-threatening illness for 30 days.

Question 30

Previous health history will affect the premiums you are charged on long-term care.

Question 31

You may need to have funds in an emergency fund to cover expenses while in the waiting period of your disability insurance.

Question 32

Disability insurance coverage will replace all of your lost income while disabled.

Question 33

Life insurance is an indication of good financial planning, since it provides a payment to the policyholder upon his or her death.

Question 34

If you and your spouse are covered by health care insurance at work, both insurance companies will have to share in payment of your medical expenses.

Question 35

Critical illness insurance benefits are paid out to disabled employees on a monthly basis.

Question 36

A coinsurance of 20 percent on a $400 prescription drug will require you to pay $80.

Question 37

It is unfortunate but a person over age 35 has a 50 percent chance of becoming disabled for longer than three months.

Question 38

Long-term care insurance covers nursing home care or assisted living benefits.

Question 39

All disability insurance covers you for the entire period of injury and rehabilitation to age 70.

Question 40

The longest period of disability coverage is a maximum of two years.

Question 41

During the time the policy is in effect, term life insurance has a good savings and investment component.

Question 42

If no one else relies on your income, life insurance may not be necessary.

Question 43

Whole life policies are the most popular form of life insurance and are used by most people to provide their entire insurance needs.

Question 44

A limited payment option on a whole life insurance policy pays a smaller share of the policy's face value to beneficiaries during the first five years of the policy.

Question 45

The more savings a household has accumulated, the less life insurance they will need.

Question 46

Disadvantages of term insurance are that it increases in cost when you renew it and that it has no value when it matures or you discontinue your policy.

Question 47

Universal life insurance is similar to whole life, but it allows the policyholder more choices of how the savings portion of the premiums are invested.

Question 48

Advantages of whole life insurance policies are that they provide long-term coverage, the rates are fixed, and they have a savings or cash value feature.

Question 49

A person's need for life insurance varies quite a bit over his or her lifetime.

Question 50

The beneficiaries of life insurance policies can only be family members or those directly affected by a person's death.

Question 51

The only reason a person would buy life insurance is to eliminate or substantially reduce the financial consequences of that person's death by providing income to his or her dependants.

Question 52

Term life insurance is considered temporary insurance, since the policy is in effect for only a relatively short period of time.

Question 53

Universal life insurance is the same from one insurance company to another and therefore is the most common and popular form of life insurance.

Question 54

The income method, basing life insurance needs on multiples of current income, is the easiest and most accurate method of determining how much life insurance a person should buy.

Question 55

If you want to borrow money from the cash value of your whole life policy, the interest rates are relatively high and the terms of the loan are quite strict.

Question 56

A disadvantage of variable life policies is that the cash value may actually decrease in value if stocks or other investments decline.

Question 57

Term insurance will provide most of a young family's life insurance coverage due to its affordable cost.

Question 58

Life insurance may not be that important for a couple who both work full-time and who could each be self-sufficient without the other person's income.

Question 59

Whole life insurance policies can be structured to provide a higher level of death benefits to beneficiaries in the early years of the policies or for the policies to be paid off in a certain time period, for example, 20 years.

Question 60

The problem with the cash value built up in a whole life insurance policy is that the money can only be used to pay off the policy or buy additional insurance.

Question 61

Which of the following is not an important consideration from the employer's perspective in sponsoring a group benefits plan?

A)The ability to write off premiums as business expenses
B)Providing coverage for employees who are uninsurable
C)Encouraging loyalty and trust among employees
D)Improving staff retention because employees feel secure

Question 62

Which of the following will likely increase the premium of long-term care insurance?

A)Having a longer waiting period before the policy goes into effect
B)Having a co-insurance provision
C)Waiting until you are retired to obtain the insurance
D)Choosing to receive benefits for a limited period

Question 63

Additional insurance commonly offered through employers includes

A)dental insurance.
B)car insurance.
C)fire insurance.
D)house insurance.

Question 64

Which of the following is true about the cost of health care in Canada?

A)The Canada Health Act covers only basic medical needs and the provinces fund supplementary benefits, which vary a lot from province to province.
B)The federal government administers all the health care expenses in the country through the Canada Health Act.
C)Health care costs as a portion of revenue are significant, and growing minimally over time.
D)Approximately half the funding for health care comes from public sector financing.

Question 65

For long-term care insurance, the higher the premium charged, the more comprehensive the coverage.

Question 66

If you understate your age on the application form of the life insurance policy, your benefit amount will be increased.

Question 67

Which of the following statements is true of disability insurance?

A)You should have it even if you are retired and living on a pension.
B)The principle of indemnification will limit the amount of coverage you can get.
C)If you are self-employed, you should have no need for disability insurance.
D)The combination of CPP, EI and Workers Compensation should provide you with sufficient coverage.

Question 68

What are the principles of the Canada Health Act which provinces and territories must adhere to in order to receive the full Canada Health Transfer Funding?

A)Public administration, accountability, universality, portability and accessibility
B)Public administration, fairness, universality, portability and accessibility
C)Public administration, comprehensiveness, universality, accountability and accessibility
D)Public administration, reasonable access, fairness, portability and medically necessary coverage

Question 69

While the Canada Health Act ensures that medically necessary services are provided based on individual need rather than the ability to pay, who funds the supplementary benefits available to certain segments of the population such as seniors, children, and social assistance recipients?

A)Canada Security Plan
B)Employment insurance
C)The provinces and territories
D)Federal government assistance plan

Question 70

Which of the following is not an important consideration from the employee's perspective regarding group benefits plans?

A)Saving money on premiums for insurance
B)Coverage for employees who are uninsurable
C)Protection on top of government plans
D)Improving staff retention

Question 71

A lump sum settlement option is usually the best choice, even if a beneficiary is not very good at managing sums of money.

Question 72

Comparing auto insurance and health insurance,

A)you have fewer options with health insurance than with auto insurance.
B)both types of policies can have deductibles.
C)the government has very little involvement in either of these areas.
D)auto insurance does not include medical benefits.

Question 73

Regarding Canada's publicly funded health care, which of the following is true?

A)It is a program totally funded and run by each province.
B)It provides free unlimited health care for low-income individuals and the unemployed.
C)It is a federal program administered by each province.
D)It is a program funded and run solely by the federal government.

Question 74

The grace period for the insurance policy typically is 25 days.

Question 75

The major underwriting factors of life insurance are age and sex, although occupations, health, and lifestyle choices are also considered.

Question 76

Using the budget method of determining life insurance needs, a family's future expected expenses is considered.

Question 77

The income method is a general formula to determine how much life insurance is needed based on your annual income.

Question 78

Riders are options that allow you to customize a life insurance policy to specific needs.

Question 79

A rider is an option that allows you to customize a policy, such as by adding term insurance for a child.

Question 80

Long-term care policies

A)have an elimination period before owners are eligible to have their long term care costs covered.
B)are relatively inexpensive and are a good value for those over age 60.
C)are essential as 28 percent of Canadians over age 65 receive care due to a long term health problem.
D)have standard coverage and insurance premiums that are the same for most Canadians.