final 7 Flashcards
(25 cards)
What is an insurance premium?
A. Your monthly payment to your insurer, regardless of whether you use any
services.
B. A list of the procedures covered by your insurance carrier.
C. An added cost you pay in order to receive higher-quality services.
D. The amount you pay out-of-pocket for a specific procedure or service.
A. Your monthly payment to your insurer, regardless of whether you use any
services.
Each of these is considered an “out-of-pocket” expense EXCEPT…
A. Your monthly premium
B. A copay of $15 to fill a prescription
C. A $1,000 deductible if you’re in an auto accident
D. Excess bills from a car accident once you’ve gone over your maximum
coverage limit
A. Your monthly premium
Which of the following insurance coverage options would be the lowest priority for a
typical single person, with no children, 1-2 years out of high school, who has a car and
lives in an apartment?
A. Health insurance
B. Auto insurance (if they have a car)
C. Life insurance
D. Renter’s insurance
C. Life insurance
Insurance companies make money by…
A. Refusing to pay out claims to policy holders
B. Collecting money from the government
C. Collecting more in premiums than they need to pay out each year
D. Keeping costs low with minimal advertising
C. Collecting more in premiums than they need to pay out each year
Insurance companies operate by charging individuals different prices for coverage
depending on their risk levels. Then, they collect everyone’s monthly premiums
together and use the money to make payments when people file a claim (for example,
someone is in an auto accident or needs to see a doctor). This concept is known as…
A. Comprehensive coverage
B. Risk pooling
C. Underwriting
D. Risk management
B. Risk pooling
Susan pays $100 per month for auto insurance. She has a $500 deductible. In June
2022 she is in an accident and it costs $8,000 to repair her car. How much will Susan
pay to repair her car?
A. $100
B. $500
C. $600
D. $7,500
500
Your parents tell you that on your 22nd birthday, they would like for you to get your own
health insurance. You are very healthy, are not taking any prescription medicines, and
generally only see your doctor for your annual physical. What type of health insurance
is likely to be best for you?
A. A low deductible plan with a high monthly premium
B. A high deductible plan with a low monthly premium
C. Your parents MUST keep you on their plan until you are 26. They cannot
legally remove you.
D. You do not need health insurance because you are healthy.
B. A high deductible plan with a low monthly premium
In general, how do insurance companies decide how much to charge an individual for
their monthly premium?
A. The company assesses the individual’s risk factors and assigns higher
premiums to higher risk individuals.
B. The company looks at the individual’s tax filings from the previous year to
assess overall wealth and ability to pay.
C. The company charges the same premium for every individual eligible for
coverage.
D. The company increases or decreases premium rates based on the stock market.
The company assesses the individual’s risk factors and assigns higher
premiums to higher risk individuals.
Which term refers to the percentage of covered medical expenses you are responsible
for paying after your deductible is met?
A. Deductible limit
B. Premium
C. Out-of-network fees
D. Co-insurance
D. Co-insurance
Lulu has a pet dog, for whom she bought an accident and illness pet insurance policy
three months ago. The dog steps on a mouse trap set out by neighbors and needs his
first vet services of the year, totaling $800. Lulu’s deductible is $1,000, her coinsurance rate is 75%, and her coverage limit is $15,000. How much does Lulu pay,
and how much does the insurance company pay for this visit?
A. Lulu pays $0, the insurance company pays $800
B. Lulu pays $200, the insurance company pays $600
C. Lulu pays $600, the insurance company pays $200
D. Lulu pays $800, the insurance company pays $0
D. Lulu pays $800, the insurance company pays $0
Which of the following statements is TRUE about auto insurance premiums?
A. If you have an auto insurance policy and don’t get into a car accident or file
any claims for a year, you get your premiums back from the insurance
company.
B. If you have an auto insurance policy and get into multiple accidents within
one year, your premium amount will decrease the next year.
C. Auto insurance premiums are a fixed price across all insurance companies.
D. If you have an auto insurance policy and get into multiple accidents within
one year, your premium amount will increase the next year.
If you have an auto insurance policy and get into multiple accidents within
one year, your premium amount will increase the next year.
Someone broke into Sam’s car by smashing the passenger window. Which type of auto
insurance coverage will help cover the cost to get the window replaced?
A. Bodily injury liability
B. Property liability
C. Collision
D. Comprehensive
D. Comprehensive
You cause an accident and injure the other driver. The case goes to trial and there is a
verdict to compensate the injured person with $58,000. You have a $75,000 coverage
limit per person for Bodily Injury. How much will the insurance company pay?
A. $0
B. $17,000
C. $58,000
D. $75,000
C. $58,000
Frank has an auto policy with a coverage limit of $30,000 and a deductible of $1,000.
He gets into an accident and the damages to his car total $6,200. Fortunately, he has
collision coverage. How much will Frank need to pay out-of-pocket?
A. $0
B. $1,000
C. $6,200
D. $30,000
B. $1,000
What type of auto insurance are you required to carry in almost every state (49 out of
50)?
A. Insurance if you damage your own property
B. Insurance if you cause injury to another person
C. Insurance in case you get into an accident with someone who does not have
insurance
D. Insurance if you cause injury to yourself
B. Insurance if you cause injury to another person
Your renter’s insurance policy costs $20/month and has a $1,000 deductible. A thief
breaks into your apartment and steals your $800 TV. How much would your insurance
company pay?
A. $0
B. $200
C. $800
D. $1,000
0
Finn moves from a rented apartment into his very first house. What should he expect
regarding the cost of homeowner’s insurance compared to renter’s insurance?
A. He will not need homeowner’s insurance, because owning a home is less risky
than renting.
B. His homeowner’s insurance will be LESS expensive than his renter’s
insurance was.
C. His homeowner’s insurance will be the same cost as his renter’s insurance
was.
D. His homeowner’s insurance will be MORE expensive than his renter’s
insurance was.
D. His homeowner’s insurance will be MORE expensive than his renter’s
insurance was.
Which BEST describes what is meant by a health insurance marketplace?
A. An online directory that lists doctor and hospital contact information
B. The portal you use to register for employer-sponsored group insurance plans
C. A federal- or state-run website with the individual health insurance plans
available in a given state
D. Any doctor’s office or hospital that shares a physical location with other
medical providers
C. A federal- or state-run website with the individual health insurance plans
available in a given state
Medicaid generally provides insurance for which of the following groups of people?
A. The elderly or disabled
B. Individuals in low-income households
C. Anyone who wants to buy coverage from the Marketplace
D. Employees who have a government position
B. Individuals in low-income households
Why would someone choose to get long-term disability insurance even if they already
have health insurance?
A. Long-term disability only covers medical bills, while health insurance will help
compensate for lost work with 40-60% of their income.
B. Long-term disability insurance plans can also extend coverage to family
members and pets.
C. Health insurance only covers regular check-ups, while long-term disabilty
insurance also covers emergencies.
D. Health insurance only covers medical bills, while long-term disability will help
compensate for lost work with a percentage of their income.
Health insurance only covers medical bills, while long-term disability will help
compensate for lost work with a percentage of their income.
Your health insurance plan has a $20 copay for certain covered prescription
medications. You arrive at the pharmacist and pick up your prescription (which is
covered under your plan) which has a list price of $75. How much would you pay the
pharmacy?
A. $0 since health insurance plans waive the cost of prescription drugs
B. $20
C. $55
D. $75
B. $20
A standard renter’s insurance policy would cover each of the following EXCEPT…
A. A small TV and some sneakers, stolen in a robbery
B. A new window when a baseball breaks the original one
C. A lawsuit brought when a visitor hits their head on a low-hanging light
fixture
D. A week of hotel reservations when the tenant has to move out due to fire
damage
A new window when a baseball breaks the original one
Bruce has just graduated from college and decides that instead of paying for
insurance, he’ll work on building up his emergency fund. This way, if something goes
wrong, he can just pay for it using cash. Why is this a risky idea?
A. It is mandatory to have auto, health, life, disability, and renters/home
insurance, so he’ll have to pay 5 penalties per year for not enrolling in these
insurance types.
B. An accident or illness can strike at any time and be quite expensive, so it’s
possible he’d need a big sum of money well before his emergency fund was
large enough.
C. Having insurance not only protects you financially, but also physically, so he’ll
be less likely to experience illness or an accident if he has insurance.
D. The sooner he starts paying for insurance, the sooner he will reach his
maximum lifetime requirement and can stop paying altogether for coverage
An accident or illness can strike at any time and be quite expensive, so it’s
possible he’d need a big sum of money well before his emergency fund was
large enough.
Your employer offers an employer-sponsored health insurance plan. Which of the
following statements is TRUE?
A. You can only see doctors who are also employees of the same company.
B. Your health insurance premiums will be paid directly from your paycheck,
pre-tax.
C. Your employer cannot fire you if you get sick or injured because you have
employer-sponsored health care.
D. You can remain on that health insurance plan for the rest of your life, even if
you no longer work there.
B. Your health insurance premiums will be paid directly from your paycheck,
pre-tax.
