AFC Module 25 - Insurance Products

Question 1

ADLs

Answer 1

Activities of Daily Living - a criterion by which insurance companies determine when the insured becomes eligible for long-term care benefits, based on the inability to perform a certain number of basic activities.

Question 2

Actual Cash Value (of personal property)

Answer 2

the purchase price of any property, less any depreciation that has occured

Question 3

Any-occupation policy

Answer 3

a type of coverage providing full benefits only if the insured cannot perform any occupation

Question 4

Automobile bodily injury liability

Answer 4

the responsibility a driver or car owner has when they are legally accountable for bodily injury losses that other people, including pedestrians, suffer

Question 5

Automobile Insurance

Answer 5

a type of coverage that combines the liability and property insurance coverages that most car owners and drivers need into a single-package policy

Question 6

Automobile medical payments insurance

Answer 6

a type of coverage that covers bodily injury losses suffered by the driver of the insured vehicle and any passengers, regardless of who is at fault

Question 7

Automobile property damage liability

Answer 7

the responsibility a driver or car owner has when they are legally accountable for damage to others’ property

Question 8

Beneficiary

Answer 8

a person who receives life insurance proceeds as per the policy’s terms

Question 9

Benefit Period

Answer 9

the maximum period of time for which benefits will be paid under a disability income or other insurance policy

Question 10

Cash value life insurance

Answer 10

a type of coverage that pays benefits at death and includes a savings/investment element providing a defined level of benefits to the policyholder prior to the death of the insured person

Question 11

Coinsurance

Answer 11

a method by which the insured and the insurer share proportionately in the payment for a loss

Question 12

Collision insurance

Answer 12

a type of coverage that reimburses the insured for losses to their vehicles resulting from a collision with another car or object, or from a rollover

Question 13

Comprehensive Automobile insurance

Answer 13

a type of coverage that protects against property damage losses to an insured vehicle caused by perils other than collision and rollover

Question 14

Contents replacement-cost protection

Answer 14

an insurance option, sometimes available in homeowner’s insurance policies, that covers the full replacement cost of any personal property

Question 15

Co-payment

Answer 15

a variation of a deductible that requires the insured to pay a specific dollar amount each time claims are made to use benefits for a specific covered expense item

Question 16

Custodial care

Answer 16

a level of care suitable for people who do not need skilled nursing care, but who

nevertheless do require supervision

Question 17

Death Benefit

Answer 17

the amount that will be paid to the beneficiary when the insured dies

Question 18

Disability income insurance

Answer 18

a type of coverage that provides a portion of the income lost when the insured cannot work because of illness or injury

Question 19

Elimination Period

Answer 19

the time period between the onset of a disability and the date that disability benefits begin

Question 20

Health Insurance

Answer 20

a type of coverage that provides protection against direct medical expenses resulting from illness and injury, based on the concept of payment after an expense occurs

Question 21

Health Maintenance Organizations (HMOs)

Answer 21

a type of health insurance plan that provides a broad range of healthcare services for a set monthly fee on a prepaid basis

Question 22

Homeowner’s insurance

Answer 22

a type of coverage that combines liability and property insurance coverages that homeowners and renters typically need into a single-package policy

Question 23

Insured policy

Answer 23

a contract between the person buying insurance (the insured) and the insurance company (the insurer)

Question 24

Insured

Answer 24

the individual covered by an insurance policy and, in the case of life insurance, is the person whose life is insured

Question 25

**Life Insurance Policy**

Answer 25

an insurance contract that promises to pay a dollar benefit to a beneficiary upon the death of the insured person

Question 26

**Long-term care insurance**

Answer 26

a type of coverage providing reimbursement for cost associated with custodial care in a nursing facility or at home

Question 27

**Medicaid**

Answer 27

a government health care program for low-income people, funded jointly by the federal and state governments

Question 28

**Medicare**

Answer 28

the federal government's health care program for the elderly

Question 29

**Needs-based approach**

Answer 29

a method of calculating the amount of insurance needed, based on consideration of all factors that might potentially affect the level of need

Question 30

**Owner/policy holder**

Answer 30

the party who retains all rights and privileges granted by the policy, including the right to amend the policy as well as the right to designate who receives the proceeds

Question 31

**Own-occupation policy**

Answer 31

a type of coverage providing benefits if the insured can no longer perform the occupation held at the onset of the disability

Question 32

**Policy Limits**

Answer 32

the aspect of a policy specifying the maximum dollar amounts that will be paid under the policy's terms

Question 33

**Preferred provider organization (PPO)**

Answer 33

a group of health care providers contracting with a health insurance company to provide services at a discount

Question 34

**Premium**

Answer 34

the fee paid for insurance

Question 35

**Term life insurance**

Answer 35

a type of coverage that provides “pure protection” against early death

Question 36

**Uninsured and underinsured motorist insurance**

Answer 36

a type of coverage that protects the insured in the case of an accident where the fault/liability lies with an uninsured or underinsured driver

Question 37

**Universal life insurance**

Answer 37

a type of coverage that provides both the pure protection of term insurance and the cash-value buildup of whole life insurance, along with face amount variability, rate of cash value accumulation, premiums, and rate of return

Question 38

**Variable-universal life insurance**

Answer 38

a type of universal insurance coverage that gives the policyholder some choices in the investments made with the cash value accumulated by the policy

Question 39

**Whole Life Insurance**

Answer 39

a type of cash-value life insurance coverage that provides lifetime life insurance protection and expects the insured to pay premiums for life