Chapter 11 Flashcards
Named person who will benefit financially if you die. Insurance policies ask the owner of the policy to name a beneficiary.
Beneficiary
Policy that covers automobile damage. Full coverage is required when you have a car loan, otherwise, you can purchase liability.
Auto Insurance
Additional points you can pay a lender to lower the interest rate on your loan at closing. Each point is equal to 1 percent of the loan amount (e.g. two points on a $100,000 mortgage would cost $2,000). Also referred to as points.
Break-Even Analysis
Cash-value insurance has higher premiums than term insurance because part of the premium pays for the death benefit coverage and part of it goes toward the policy’s cash value. Cash-value life insurance is often criticized because investment options may be limited and not as good as what an investor could get on his or her own.
Cash Value Insurance
demand for payment in accordance with an insurance policy
Claim
Insurance that covers the act or process of colliding; a crash or conflict. Car insurance included in Full coverage for autos with a loan.
Collision
In car insurance, coverage which pays to repair or replace the policy owner’s vehicle and personal property inside of it if it was damaged or lost due to other agents, such as fire, theft, flood, or vandalism.
Comprehensive
The amount an insured person is expected to pay for a medical expense at the time of the visit.
Co-Pay
The amount of insurance coverage an individual or entity will have is determined by multiple factors, however when boiled down it comes down to the probability of the insured event actually occurring. For example, most insurers will charge higher premiums for young male drivers as they deem the probability of them being involved in accident to be higher than say, a middle-aged married man with years of driving experience.
Coverage
The amount of a loss that an insurance policy holder has to pay out-of-pocket before reimbursement begins in accordance with the coinsurance rate.
Deductible
The gradual elimination of a liability, such as a mortgage, in regular payments over a specified period of time. Such payments must be sufficient to cover both principal and interest. Also called amortization
Elimination Period
Pays a certain amount above the policy limit to replace a damaged home, generally 120 percent or 125 percent. Similar to a guaranteed replacement cost policy, which has no percentage limits. Most homeowner policy limits track inflation in building costs. Guaranteed and extended replacement cost policies are designed to protect the policyholder after a major disaster when the high demand for building contractors and materials can push up the normal cost of reconstruction.
Extended Replacement Cost
Cost Homeowners policy that pays the full cost of replacing or repairing a damaged or destroyed home, even if it is above the policy limit.
Guaranteed Replacement
Typically, a health insurance policy is a form of insurance that helps you pay for medical expenses ranging from preventative medical check ups to treatment for illnesses and emergency care. A health insurance savings plan (HSA) is not health insurance but a tax-advantaged medical savings account used by American tax payers who are enrolled in a High Deductible Health Plan (HDHP).
HSA
is designed to protect someone against having to pay out of pocket for expensive medical bills by offering coverage for different medical procedures and treatments.
Health Insurance
