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Personal Finance in Modern Society > Quiz # 3 > Flashcards

Quiz # 3 Flashcards

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1
Q

Advantages of renting a home

A

Easy to move, fewer responsibilities and minimal financial commitment

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2
Q

The disadvantage of renting a home

A

No tax benefits, Limitation regarding remodeling, restrictions regarding pet/other activities

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3
Q

Advantages of owning a home

A

pride of ownership, financial benefits, lifestyle flexibility

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4
Q

Disadvantages of owning a home

A

limited mobility, more financial charges

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5
Q

What is subletting?

A

Another person takes over the rent payment and lives in a rental unit but the original, but their name is still on the lease

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6
Q

What is the legal document that includes information about the due date of monthly rent and provides the tenant protection from rent increases and gives the landlord the right to sue a tenant for nonpayment of rent or destruction of property?

A

Lease

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7
Q

What is the legal name of the owner/landlord?

A

Lessor

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8
Q

What should a home buyer consider when evaluating a house?

A

Property damages, appraised/land value of the property, location, comparable – property values of home in the area, schools’ system, zoning laws

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9
Q

What is the name of the clause in an offer to buy a home that states that the offer is only good if and when the buyer sells their current home?

A

Contingency clause

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10
Q

What is the type of mortgage in which the interest rate can increase or decrease during the life of the loan?

A

Adjustable - Rate Mortgage (ARM)

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11
Q

What is the name of the document that transfers ownership of property from one party to another?

A

Deed

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12
Q

When selling a house, the seller should set the price after considering current

A

mortgage rates, current housing demand, recent selling prices of homes in the areas, appraised value of the home.

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13
Q

Many locations require that renters be paid interest on their security deposits. If you have a security deposit of $1,500, how much interest would you expect to earn per year at 4 percent?

A

$60

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14
Q

Joan was driving her own car and collided with a pickup truck. Joan sustained $126,000 in injuries, and her passenger sustained $11,000 in injuries. If her coverage was 100/300/50, what are the total medical expenses the insurance company would pay for this accident?

A

Total cost: 137,000 insurance company 50,000 Still owed: 87,000

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15
Q

Mike has an old car and wants to keep his insurance costs down, but he wants coverage in case he damages the property of others, including street signs and telephone poles. In order to minimize the financial impact of an accident he may cause, he should, at a minimum, carry which type of insurance?

A

Property damage liability coverage

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16
Q

Henry was driving at dusk and hit a deer running across the road. His damage would be covered under his

A

comprehensive physical damage coverage

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17
Q

Paul was driving his kids to a piano lesson in a 2005 minivan. While driving, he was hit by an uninsured motorist. Although Paul and his kids had only minor injuries, their vehicle was totaled. Based on this information, what type of insurance will cover the cost of injuries for Paul and his kids?

A

Uninsured motorist protection

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18
Q

What is the failure to take ordinary or reasonable care to prevent an accident from happening?

A

Negligence

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19
Q

What is the fee that a policyholder pays when an insurance company agrees to take on the risk?

A

Premium

20
Q

Lexi went to the doctor three times and each appointment cost $200. Her copayment was $25 per visit. How much was Lexi required to pay in total for her three visits?

A

$75 for the co-payments

21
Q

Lanie has a health insurance policy that includes a deductible of $500. If her total bill is $3,000, how much will her insurance pay?

A

$3,000 – $500 = $2,500

22
Q

Lucy is considering two health insurance policies. One includes a deductible of $600 and the other includes a coinsurance of 20%. If a bill is $4,000, how much will she be required to pay under the policy with the coinsurance?

A

$4,000 x .20 = $800

23
Q

What can you do to receive discounts on home insurance?

A

Shop around, the new homebuyers, loyalty discounts, security and safety measures, bundling

24
Q

What is the type of mortgage which provides older homeowners with tax-free income in the form of a loan that is repaid when the home is sold, or the homeowner dies?

A

A reverse mortgage

25
Q

health insurance to finance the cost of major illness and injury

A

major medical

26
Q

An insurance company representative, licensed by the state

A

Agent

27
Q

The amount of charges that must be absorbed by the protected person before benefits are paid by the company

A

Deductable

28
Q

__________ renewable contract – one which the insured has the right to continue

A

guaranteed

29
Q

Any chance of loss

A

Risk

30
Q

—– period, time between the period of disability and the beginning of disability income insurance benefits

A

Elimanation

31
Q

Termination of the policy because consumer has failed to pay premium within time required

A

Lapses

32
Q

A demand for payment benefits

A

Claim

33
Q

Benefits paid in a predetermined amount in the event of a covered loss

A

Indemnity

34
Q

______ period, a specific period after a premium payment is due in which consumer may make payments

A

Grace

35
Q

Conditions that increase the likelihood of loss occurring

A

Hazard

36
Q

Specific conditions for which policy will not pay

A

Exclution

37
Q

Comprehensive health care group

A

HMO

38
Q

A government health insurance premium for those 65 and older

A

Medicare

39
Q

_______ term disability – offered for prolonged illness

A

Long

40
Q

Amount payable by insurance company for coverage

A

Benefits

41
Q

Physical or metal handicap resulting from injury or illness

A

disability

42
Q

period from date of employment to date insurance is in force

A

waiting

43
Q

Agreement attached to policy which exempts coverage for certain conditions normally covered

A

Waiver

44
Q

_______ benefits which include hospital, surgical , and doctor’s visits

A

Basic

45
Q

non payment of premium

A

Laspe

46
Q

_____ benefits paid if someone dies

A

death

47
Q

A policy is renewable each _____.

A

Year

Personal Finance in Modern Society (1 decks)

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