Personal Finance Chapter 9 Test

Which of the following would not be a huge financial risk (and, therefore would not requireinsurance) if you had a full emergency fund of $500 or more? You lose your cell phone
The time between the disabling event and the beginning of payments in your disability coverageis called Elimination period
Life insurance policy for a specific period of time is called: Term
The purpose of insurance is to: Transfer financial risk
Which of the following is not a recommended way of lowering your car insurance premiums? Drop your auto insurance altogether
Which of the following types of insurance is not recommended for a young single adult? Auto Insurance
Which of the following is not a recommended way to save on your health insurance premium? If you are young and healthy, you do not need health insurance.
A person becomes self-insured when: Their kids are grown, they have no debt, and they have a fully funded emergency fund
Which of the following is true? Any kind of duplicate insurance coverage is a bad idea
Which of the following statements about long-term care insurance is false? You should not buy long-term care insurance until age 30.
Which of the following statements about disability insurance is false? Disability insurance is not necessary if you have a good health insurance policy.
Which of the following statements about life insurance is true? Cash value insurance is normally for life and is more expensive than term life insurancebecause it funds a savings plan.
Which of the following is not a benefit of having a will? You only need a will if you have a large estate.
Which of the following policies would be a duplicate coverage for your health insurance policy? Cancer and hospital indemnity insurance
You are involved in a two-car accident in which you are at fault. The other driver is injured andyour insurance covers the medical expenses of the victim. This type of insurance coverage iscalled: Liability
Comprehensive coverage takes care of damage to your car that is not caused by a collision. TRUE
After high school, you should have the following types of insurance: auto, renterʹs, health andlong-term care insurance FALSE
Following the Five Foundations will help you to, one day, become self-insured. TRUE
Renterʹs insurance is not necessary if you donʹt have a lot of expensive things. FALSE
Prepaid burial policies are a good idea FALSE
Duplicate coverage, or any extra insurance on top of your existing insurance, is not necessary. TRUE
Any insurance with cash value or that combines insurance with investments is a bad idea. TRUE
You should not buy identity theft protection that only provides credit report monitoring. TRUE
Good identity theft protection includes restoration services TRUE
Disability insurance offered through your employer is usually the most expensive coverageoption. FALSE
Describes the type of coverage in an insurance agreement (policy, premium) policy
The recipient of assets passed on from the death of a friend or relative (insured, beneficiary) beneficiary
A legally enforceable declaration of how a person wishes his or her property to be distributed after death(policy, will) will
Specific amount of money that you pay when insurance only covers a portion of costs (fee, out-of-pocketexpense) out-of-pocket expense
Applies to the amount of protection you have through an insurance company in the event of a loss (coverage,premium) coverage
Paperwork filed with an insurance company in order to get them to cover a loss for someone they insure(appraisal, claim) claim
The amount you pay monthly, quarterly, semiannually or annually to purchase different types of insurance(premium, co-pay) premium
Insurance that covers property damage and medical bills if you are at fault in a car accident or if someone getshurt on your property (uninsured motorist protection, liability) liability
Amount you must pay before you begin receiving any benefits from your insurance company (deductible,income) deductible
An amount of money you pay to help cover a portion of your medical costs (annuity, co -payment) co-payment

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