PFL -- Insurance -- Chapter 6

Question 1

Of the many risks you will face during your lifetime, some are avoidable, and some are not.

Answer 1

true

Question 2

Risk is the chance of injury, damage, or economic loss.

Answer 2

true

Question 3

A business can take action to avoid or lessen the impact of a systemic risk.

Answer 3

false

Question 4

Avoiding risks is the strategy whereby you stop the behavior that leads to the risk.

Answer 4

true

Question 5

When you buy insurance, you are following a risk strategy known as transferring risk.

Answer 5

true

Question 6

Self-insuring is an effective method of reducing risks.

Answer 6

false

Question 7

Fee-for-service health insurance plans typically pay 100% of the costs for doctor visits and hospital says.

Answer 7

false

Question 8

If you are a member of a health maintenance organization (HMO), you can choose to be treated by any doctor.

Answer 8

false

Question 9

Medicare is an example of a government-sponsored health care plan.

Answer 9

true

Question 10

Major medical coverage protects against loss due to very serious injury or illness.

Answer 10

true

Question 11

Today people can expect to pay lower insurance copays and deductables than in the past.

Answer 11

true

Question 12

Health flexible spending accounts allow you to set aside money pretax to pay for qualified medical expenses.

Answer 12

true

Question 13

Short-term disability insurance usually picks up at the point where long-term disability ends.

Answer 13

false

Question 14

Renewable term life insurance has the same premium each year, but the amount of life insurance benefits decreases each year.

Answer 14

false

Question 15

Permanent life insurance provides a death benefit and builds cash value.

Answer 15

true

Question 16

Group life insurance is a lower risk to the insurance company because the risk is spread among more people.

Answer 16

true

Question 17

Portable insurance is group life insurance that terminates when you leave your job.

Answer 17

false

Question 18

When items are stolen from your home, you must file a claim with the insurance company to get reimbursed for the loss.

Answer 18

true

Question 19

Financial responsibility laws require that motorists carry collision insurance on their cars.

Answer 19

false

Question 20

You may be able to reduce your insurance premiums if you purchase insurance from an insurance agency rather than directly from an insurance company.

Answer 20

true

Question 21

A type of life insurance that allows policyholders to change the premiums and the death benefit throughout the life of the policy is called

Answer 21

universal life

Question 22

A type of homeowner’s coverage that provides protection for you if someone is injured on your property is called

Answer 22

personal liability

Question 23

Which type of automobile insurance provides coverage against damage to your car if it is hit by another car or turns over

Answer 23

collision

Question 24

Which type of automobile insurance provides coverage against damage to your car from fire, theft, hail, water falling objects or vandalism?

Answer 24

comprehensive

Question 25

All of the following actions would likely help reduce the cost of automobile insurance except:

Answer 25

driving more during the week and less on weekends

Question 26

Which of the following types of risk might involve breaking your leg and missing an important event?

Answer 26

personal risk

Question 27

Which of the following risk strategies involves lowering your chances of risk, such as taking lessons to lower your risk of falling while skiing?

Answer 27

reducing risks

Question 28

Which of the following risk strategies involves self-insuring?

Answer 28

assuming risks

Question 29

Which of the following types of health insurance plans allows patients to choose doctors from approved lists and has a group of health care providers who work together to provide services

Answer 29

prefered provider organization

Question 30

Which of the following types of health insurance coverage provides for routine medical care, hospital stays, and surgery services?

Answer 30

basic health care

Question 31

Which of the following actions would help reduce the cost of health insurance premiums?

Answer 31

raising your deductible and copay

Question 32

Group insurance plans:

Answer 32

both a and c

Question 33

Which of the following policies provides a portion (such as 65%) of regular pay for up to 2 yrars to an insured person who cannot work due to illness or injury?

Answer 33

short term disability

Question 34

The amount of money you must pay toward your medical expenses before your i nsurance company begins to pay is called the:

Answer 34

deductibles

Question 35

Which of the following types of life insurance is also called pure insurance because it does not build cash value?

Answer 35

term

Question 36

Losing money, big or small, is which type of risk?

Answer 36

risk of financial loss

Question 37

The amount you pay each time you visit a doctor is called the:

Answer 37

copay

Question 38

Which of the following types of life insurance is the least expensive?

Answer 38

term

Question 39

Which of the following would be considred real property?

Answer 39

house

Question 40

Which of the following provides liability coverage beyond the coverage in your home or auto insurance policy?

Answer 40

umbrella policy

Question 41

The price paid for insurance coverage

Answer 41

premium

Question 42

A tenant’s policy that protects against the loss of personal property

Answer 42

renters insuranre

Question 43

Buying insurance to shift the risk of financial loss to an insurance company

Answer 43

risk transfer

Question 44

Setting aside money to be used in the event of an injury or loss

Answer 44

self-insure

Question 45

Finding ways to lower your chance of incurring a loss

Answer 45

risk reduction

Question 46

The person designated to receive money from a life insurance policy?

Answer 46

beneficiary

Question 47

The liklihood of a risk resulting in a loss

Answer 47

probability

Question 48

Stopping behavior that leads to a risk

Answer 48

risk avoidance

Question 49

A physical injury, damage to property, or disappearance of property

Answer 49

loss

Question 50

A clause in a health insurance policy that provides 100% coverageof medical expenses after a certain amount has been paid by the insured

Answer 50

stop loss provision