8. Insurance

Question 1

Anticipated expenses

Answer 1

Regular payments that must be made to cover certain regular expenditures. These could include rent, utility bills, and groceries.

Question 2

Fixed costs

Answer 2

Cost which remain the same each month. (eg., rent, house payments, automobile, loan payment)

Question 3

Variable costs

Answer 3

Costs are anticipated but may vary from month to month. Examples may include entertainment, hobbies or certain educational expenses.

Question 4

Unanticipated expenses

Answer 4

Expenses that are not foreseen and may happen at irregular intervals. Examples can include medical expenses, auto or appliance repairs or losses from natural disasters.

Question 5

Anticipated income

Answer 5

Regular receipts of funds that come as part of a contractual obligation. These can include wages, salary payments or certain conditional payments such as scholarships.

Question 6

Unanticipated income

Answer 6

Payments received that are not foreseen or may happen at irregular intervals. These can include bonuses and gifts.

Question 7

Assigned risk

Answer 7

A driver or class of drivers that would be denied insurance coverage but must carry auto insurance under state law.

Question 8

Premium

Answer 8

An amount of money to be paid for an insurance policy.

Question 9

Deductible

Answer 9

Regarding insurance policies: A set amount of money an insured person must pay per loss before the insurance company will pay a claim.

Question 10

No fault Insurance

Answer 10

In some states, insurance claims are not paid by the party at fault for an accident. Instead, each party in an accident is compensated by their own company, regardless of which party caused the accident.

Question 11

Liability insurance

Answer 11

Automobile insurance that pays for the costs of bodily injury and property damage when the insured person damages someone or something with his or her car.

Question 12

Collision Insurance

Answer 12

Insurance that pays for repairs to an automobile, or replacement of the automobile (minus the deductible in each case), if the automobile is hit by another car.

Question 13

Comprehensive Insurance

Answer 13

Insurance that pays for repairs to an automobile, or replacement of an automobile (minus the deductible in each case), if the automobile is stolen or damaged by something other than a collision (for example, by a hail storm).

Question 14

Personal Injury Protection

Answer 14

A portion of auto insurance that pays for medical injuries of people in your car.

Question 15

Uninsured/Underinsured Motorist insurance

Answer 15

Insurance coverage that will pay a driver who is injured or otherwise suffers damages due to actions of a driver of another vehicle who is uninsured or does not cover sufficient insurance to pay all the damages.

Question 16

Property insurance

Answer 16

Provides payment to the insured person if his or her property is damaged or destroyed by an accident covered by the insurance policy. (eg., homeowner’s insurance & renter’s insurance)

Question 17

Professional liability insurance

Answer 17

A type of insurance purchased by professional people to protect against malpractice and other litigation.

Question 18

Umbrella liability insurance

Answer 18

provides additional protection should other policies not be sufficient.

Question 19

Types of life insurance

Answer 19

temporary insurance and permanent insurance

Question 20

Term life policy

Answer 20

An insurance policy with a set duration limit on the coverage period. Once the policy is expired, it is up to the policy owner to decide whether to renew the insurance policy or to let the coverage end. This type of insurance policy contrasts with permanent life insurance, in which duration extends until the policy owner reaches 100 years of age (i.e. death).

Question 21

Whole life insurance

Answer 21

A life insurance contract with level premiums that has both an insurance and an investment component. The insurance component pays a stated amount upon death of the insured. The investment component accumulates a cash value that the policyholder can withdraw or borrow against.

Question 22

Co-pays

Answer 22

The portion of a medical service charge paid by the insured. This is paid first and the balance of the charge is submitted to the insurer for payment.

Question 23

Dental insurance

Answer 23

A specific type of medical insurance designed to cover care of the teeth and gums.

Question 24

Disability insurance

Answer 24

A type of insurance meant to provide long-term coverage and care if the insured is unable to work due to illness or injury.

Question 25

Major medical insurance

Answer 25

Insurance that covers most serious medical expenses up to a maximum limit, usually after a deductible has been met.

Question 26

Vision insurance

Answer 26

A specific type of medical insurance designed to cover basic optometric needs like eye exams, glasses, and contracts

Question 27

Health Savings Account (HSA)

Answer 27

An account that may be offered with high-deductible health plans for the purpose of saving for medical expenses that high-deductible health plans do not cover.

Question 28

Cash value

Answer 28

the cash amount offered to the policyholder by the life insurance company. Cancellation of the contract - may not apply to some kinds of life insurance contracts. (eg., term life DOES NOT VUILD CASH VALUE. Whole DOES build cash value.)

Question 29

Personal inventory

Answer 29

A listing of all the items in your home, often used in insurance claims; A list of all of one’s personal property. This is useful in cases of fire, theft, and property damage. This inventory can be supplemented with photographs. It is important to keep the record in a safe place away from the primary residence.

Question 30

Net worth

Answer 30

The current value of a person’s assets minus liabilities.

Question 31

Asset

Answer 31

Something of monetary value owned by an individual or an organization.

Question 32

Liability

Answer 32

Legal responsibility to pay debt or for damages or losses one has caused. (eg., balances on car loans, bank loans, mortgage loans, and credit cards.

Question 33

Net worth statement

Answer 33

A formal report that shows what an individual owns, what an individual owes, and the difference between the two.

Question 34

Monetary policy

Answer 34

Federal Reserve decisions that shape the economy by influencing interest rates and the supply of money

Question 35

The real value of money

Answer 35

the goods and services that can be purchased with a certain amount of money.

Question 36

contractionary fiscal policy

Answer 36

The Fed will increase interest rates to slow economy down.

Question 37

Expansionary fiscal policy

Answer 37

The Fed will decrease interest rates to stimulate the economy.