Chapter 11 Vocab

Question 1

Health Insurance

Answer 1

protects you against overwhelming medical expenses

Question 2

Preferred provider organization

Answer 2

a group of selected health care providers who offer comprehensive services at preset reimbursement levels

Question 3

Health maintenance organization

Answer 3

predetermined health plan in which the care providers contract with or are employees of the HMO to provide you with services

Question 4

Deductible

Answer 4

Amount of money you must pay each before your insurance kicks in

Question 5

Co-Payment

Answer 5

predetermined flat fee that you pay for health care services

Question 6

Co-insurance

Answer 6

you pay a certain percentage of medical expenses after a deductible has been paid

Question 7

Life insurance

Answer 7

financial protection for the family in case the “breadwinner” dies

Question 8

Term Life insurance

Answer 8

you buy it for a specified time or to a specific age, most inexpensive, doesn’t accumulate cash value

Question 9

Beneficiary

Answer 9

a person who will receive the amount of insurance coverage that you buy

Question 10

Whole life insurance

Answer 10

• Policyholder pays the same premium amount for a certain number of years
• Annual premiums are initially higher than term, but in the long run they may become less since they stay level
• If you plan on having insurance for more than 20 years it is usually more advantageous to have whole life insurance

Question 11

Cash Value

Answer 11

the amount of money you’ll receive if you cancel your policy

Question 12

Limited Payment policy

Answer 12

offers lifetime protection, pay premiums only for a specified # of years or until you reach a certain age

Question 13

Universal life insurance

Answer 13

a combo of a life insurance policy and a savings plan; you pay minimum premium, but anything over the minimum goes into an investment account that earns interest