2015 Ch 9 Personal Finance

1.

1 point

Describes the type of coverage in an insurance agreement

premium

co-pay

policy

deductible

2.

1 point

Amount you must pay before you begin receiving any benefits from your insurance

premium

liability

deductible

annuity

3.

1 point

The purpose of insurance is to

develop a savings plan

provide and investment opportunity

Transfer Financial risk

all of the above

4.

1 point

Following the Five Foundations will help you to, one day, become self-insured.

True

False

5.

1 point

To protect yourself against large hospital bills, it is a good idea to purchase

Long-term care insurance

Dental insurance

Medical insurance

Liability insurance

6.

1 point

To protect yourself against large hospital bills, it is a good idea to purchase

Dental insurance

Liability insurance

Long-term care insurance

Medical insurance

7.

1 point

Specific amount of money that you pay when insurance only covers a portion of costs

fee

out-of-pocket expense

premium

prize

8.

1 point

Duplicate coverage, or any extra insurance on top of your existing insurance, is not necessary.

True

False

9.

1 point

One of the items listed below is NOT a type of insurance which protects against financial loss

Health insurance

Renter's insurance

Disability insurance

Catastrophic insurance

10.

1 point

Good identity theft protection includes restoration services.

True

False

11.

1 point

You are involved in a two-car accident in which you are at fault. The other driver is injured and your insurance covers the medical expenses of the victim. This type of insurance coverage is called:

uninsured motorist protection

comprehensive

collision

liability

12.

1 point

Which of the following statements about long-term care insurance is false?

Long-term care insurance is not the same as disability or short -term medical care.

A good long-term care policy will include in-home care.

You should not buy long-term care insurance until age 30.

At least 69% of people over the age of 65 will require long -term care at some point.

13.

1 point

Which of the following statements about life insurance is true?

There is no difference between term and cash value life insurance.

You will always need life insurance.

Term life insurance should be avoided because the policy will expire and it has no savings plan built into it.

Cash value insurance is normally for life and is more expensive than term life insurance because it funds a savings plan.

14.

1 point

Which of the following is NOT a recommended way to save on your health insurance premium?

See if a Health Savings Account would make sense for your situation.

If you are young and healthy, you do not need health insurance.

Increase your deductible.

Increase your stop-loss or your maximum out-of-pocket expense.

15.

1 point

Health Insurance, 401K matching, tuition reimbursements, and paid sick time are examples of

credit risks

components of total income

fraud

investments

16.

1 point

Which of the following is NOT a recommended way of lowering your car insurance premiums?

increase your deductible

Get good grades and take a driver education class

shop around

Drop your auto insurance altogether

17.

1 point

To reduce your insurance premiums, you can

Purchase an umbrella policy

Increase your deductible

Purchase a newer car

Pay your premiums ahead of time

18.

1 point

If you have a good income and a family to support, you should purchase

Less automobile insurance coverage

Less medical insurance coverage

Less term life insurance coverage

More term life insurance coverage

19.

1 point

You should purchase insurance when

the cost of insurance is significant.

the risk of injury, damage, or economic loss is significant.

the probability that you will suffer a loss is low.

the probability that you will suffer a loss has not been determined.

20.

1 point

Renterʹs insurance is not necessary if you donʹt have a lot of expensive things.

True

False

21.

1 point

If you have children or family members that you financially support, it is a good idea to purchase this insurance to help pay bills if you were to die

Dental insurance

Term life insurance

Personal insurance

Identity theft insurance

22.

1 point

What is the best credit card fraud prevention tip?

Never use it

Use it sparingly

Use it often

Buy things online on public wifi

23.

1 point

Paperwork filed with an insurance company in order to get them to cover a loss for someone they insure

Premium

Claim

Policy

24.

1 point

Insurance is an essential financial planning tool because it

Transfers the risk to the insurance company

Protects your liabilities

Allows you to take more chances

Motivates you to stay healthy

25.

1 point

The amount you pay monthly, quarterly, semiannually or annually to purchase different types of insurance

deductible

co-pay

fee

premium

26.

1 point

What is the first thing to do when affected by identity theft?

Run Away

Call the police

Put a plan together

Punch the wall

27.

1 point

Which of the following statements about disability insurance is false?

Disability insurance is not necessary if you have a good health insurance policy.

A longer elimination period will lower your premium cost.

Your coverage should be for 65% of your income.

After college, short-term disability should be covered by your emergency fund of three to six monthsʹ worth of expenses, staying out of debt, and having a money plan.

28.

1 point

After high school, you should have the following types of insurance: auto, renterʹs, health and long-term care insurance.

True

False

29.

1 point

What insurance covers your salary if you were to get cancer and could not work for 6 months

life

long-term care

renters

disability

30.

1 point

Life insurance policy for a specific period of time is called

term

universal

whole life

level

31.

1 point

Which of the following types of insurance is NOT recommended for a young single adult?

life insurance

auto insurance

identity theft insurance

health insurance

32.

1 point

A person becomes self-insured when:

They own their own business

Their kids are grown, they have no debt, and they have fully funded retirement

Everyone should have term life insurance regardless of age or financial well-being

They have no debt

33.

1 point

Which of the following policies would be a duplicate coverage for your health insurance policy?

cancer and hospital indemnity insurance

auto insurance

long term care insurance

disability insurance

34.

1 point

You should NOT buy identity theft protection that only provides credit report monitoring.

True

False

35.

1 point

Prepaid burial policies are a good idea.

True

False

36.

1 point

Which of the following is true?

Any kind of duplicate insurance coverage is a bad idea.

You can never be too safe-there is no bad insurance.

Mortgage LIFE insurance is necessary if you are a homeowner.

Pet insurance is a good idea since pet emergencies can be very expensive.

37.

1 point

Comprehensive coverage takes care of damage to your car that is not caused by a collision.

True

False

38.

1 point

Any insurance with cash value or that combines insurance with investments is a bad idea.

True

False

39.

1 point

Disability insurance offered through your employer is usually the most expensive coverage option.

True

False

40.

1 point

Which of the following would not be a huge financial risk (and, therefore would not require insurance) if you had a full emergency fund of $500 or more?

lose your cell phone

car accident

identity gets stolen

medical emergency

41.

1 point

Rent and health insurance premiums are examples of a

fixed expense

variable expense

not necessary

discretionary expense

42.

1 point

Which of the following is NOT true about a will?

Your will can be an expression of your personal values.

A will enables you to nominate the persons who will handle your estate or serve as guardians to your children, and it allows you to determine who will receive all the property you have accumulated over your lifetime.

You only need a will if you have a large estate.

A well-drafted will can allow your family to minimize death taxes and other costs that may drain your estate of assets.

43.

1 point

To protect personal injury in a car accident, ____ insurance is purchased.

life

auto

travel

home