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Exams > Exam 3 > Flashcards

Exam 3 Flashcards

CH 8,9,10

1
Q

Insurance

A

protection against possible financial loss

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2
Q

Hazard

A

anything that increases the likelihood of loss through some peril

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3
Q

Risk managment

A

an organized plan for protecting yourself, your family, and your property that reduces financial losses caused by destructive events

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4
Q

General risk management techniques

A

Risk avoidance, risk reduction, risk assumption, & risk shifting

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5
Q

Risk avoidance

A

Choosing not to participate at all in any kind of heavy physical activity

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6
Q

Risk assumtion

A

taking on responsibility for the negative results of a risk

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7
Q

Self insurance

A

setting up a special fund possibly from savings to cover the cost of a loss

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8
Q

Risk shifting

A

In exchange for the fee you pay, the insurance company pays for your losses

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9
Q

Deductible

A

the set amount that the policyholder must pay per loss on an insurance policy

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10
Q

premium

A

the amount of money a policy holder is charged for an insurance policy

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11
Q

coverage

A

the protection provided by the terms of an insurance policy

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12
Q

policy

A

a written contract for insurance

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13
Q

liability

A

legal responsibility for the financial cost of another person’s losses or injuries

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14
Q

risk reduction

A

decreasing the likelihood that risk will cause you harm

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15
Q

Broad form

A

covers personal property against perils specified in the policy

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16
Q

comprehensive form

A

protects personal property against all persils, not specifically excluded in the policy

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17
Q

homeowners insurance

A

coverage for a place of residence and its associated financial risks

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18
Q

What all does renters insurance cover?

A

Personal property, additional living expenses, & personal liability and related coverage

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19
Q

household inventory

A

a list or other documentation of personal belongings, with purchases dates and cost information

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20
Q

What all is covered by a homeowners policy

A

personal property, additional living expenses, personal liability and related coverage, specialized coverage, & the building in which you live and other structures on the property, along with detached structures such as garage, toolshed, plants, & trees

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21
Q

Influences that affect premium

A

Location of home, policy type, & type of structure

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22
Q

HO-3 coverage inlucdes

A

windstorms, theft, smoke, fire and lightning

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23
Q

no-fault system

A

a motor vehicle insurance program in which drivers involved in accidents collect medical expenses, lost wages, and related injury costs from their own insurance companies

24
Q

Basic health insurance coverage

A

Hospital expense insurance, surgical expense insurance, and physician expense insurance.

25
Q

hospital expense insurance

A

Pays part or all of hospital bills for room, board, and other charges.

26
Q

surgical expense insurance

A

Pays part or all of the surgeon’s fees for an operation.

27
Q

physician expense insurance

A

Provides benefits for doctors’ fees for nonsurgical care, X rays, and lab tests.

28
Q

coinsurance

A

A provision under which both the insured and the insurer share the covered losses.

29
Q

stop loss

A

A provision under which the policyholder pays a certain amount, after which the insurance company pays 100 percent of the remaining covered expenses.

30
Q

copayment

A

A provision under which the insured pays a flat dollar amount each time a covered medical service is received after the deductible has been met.

31
Q

major medical expense

A

pays the large costs involved in long hospital stays and multiple surgeries, and it covers every type of care and treatment prescribed by a physician, in and out of a hospital.

32
Q

Managed care is offered by

A

Point-of-service plans

Health maintenance organizations

Preferred provider organizations

33
Q

health maintenance organization (HMO)

A

A health insurance plan that provides a wide range of health care services for a fixed, prepaid monthly premium.

34
Q

preferred provider organization (PPO)

A

A group of doctors and hospitals that agree to provide health care at rates approved by the insurer.

35
Q

point-of-service (POS) plan

A

A network of selected, contracted, participating providers

36
Q

medigap insurance

A

Supplements Medicare by filling the gap between Medicare payments and medical costs not covered by Medicare.

37
Q

disability income insurance

A

Provides payments to replace income when an insured person is unable to work.

38
Q

higher or lower premiums are charged on life insurance policies for those likely to die sooner

A

higher

39
Q

life expectancy in the US is increasing or decreasing?

A

increasing

40
Q

what is life insurance?

A

when a person joins a risk-sharing group known as an insurance company and purchases a contract also called an insurance
policy

41
Q

nonparticipating dividend

A

life insurance that does not provide policy dividends; nonpar policy

42
Q

participating policy

A

life insurance that provides policy dividends

43
Q

term insurance

A

life insurance protection for a specified period of time; for customers, known to be best value; aka temporary life insurance for

44
Q

What is the Easy Method?

A

Used for estimating life insurance, “typical family” will need 70 percent of your salary for 7 years before they adjust to the financial consequences of your death

45
Q

What are the different types of terms?

A

renewable, multiyear level, conversion, decreasing & return of premium

46
Q

renewable term

A

ends at the conclusion of the term, but you can continue it for another term

47
Q

multiyear level term

A

guarantees that you will pay the same premium for the duration of your policy

48
Q

conversion term

A

the type that allows you to change from term to permanent coverage; has a higher premium

49
Q

whole life insurance

A

An insurance plan in which the policyholder pays a specified premium each year for as long as he or she lives

50
Q

cash value

A

The amount received after giving up a life insurance policy.

51
Q

universal life insurance

A

a whole life policy that combines term insurance and investment elements

52
Q

nonforfeiture clause

A

A provision that allows the insured not to forfeit all accrued benefits.

53
Q

rider

A

A document attached to a policy that modifies its coverage.

54
Q

double indemnity

A

A benefit under which the company pays twice the face value of the policy if the insured’s death results from an accident.

55
Q
A

Exams (4 decks)

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