Insurace

Question 1

How insurance works—Transfer of Risk

Answer 1

Insurance policies transfers all or some of the financial impact of unexpected events. Insurance exists to help individuals recover from the financial consequences of these events by pooling the resources of a large group to pay for the losses of a small group.

Question 2

Insurance deductible

Answer 2

A deductible is the amount that the insured has agreed to pay before the insurer is obliged to pay anything on a covered claim. The higher the deductible the lower the monthly premium (payment) – the lower the deductible the higher the monthly premium (payment).

Question 3

Collision coverage—when do consumers normally terminate this coverage

Answer 3

Collision coverage on your car insurance policy that will repair damages to your vehicle when something collides with your vehicle. Consumers terminate/cancel the policy when the value of the car is less than the replacement pay out by insurance company.

Question 4

Term life insurance

Answer 4

Term life insurance is an insurance policy that will pay a lump-sum benefit to your family or another beneficiary of your choice, if you die while the policy is in effect. Is not a permanent life insurance policy.

Question 5

Renters Insurance

Answer 5

is insurance you buy to protect you furniture, belongings, etc. in case of a burglary, fire, or some natural disaster. Also covers liability/injury to others.

Question 6

Whole life insurance

Answer 6

Whole life insurance is a policy that is also a way to invest money. It is referred to as a permanent life insurance policy because, as long as you pay your premiums, the policy is yours for life, providing your loved ones with a guaranteed benefit upon your death.

Question 7

Health insurance and co-pay

Answer 7

health insurance is insurance against the risk of incurring medical expenses among individuals. By estimating the overall risk of health care and health system expenses, among a targeted group, an insurer can develop monthly premium to ensure that money is available to pay for the health care benefits specified in the insurance agreement. A co-pay is the amount of money you pay out-of-pocket for a covered medical service. Co-pays are typically a flat dollar amount for a doctor’s office visit, prescriptions or lab tests.

Question 8

Disability Insurance

Answer 8

Disability insurance will cover your bills while you are disabled or cannot work, with an injury or illness for a certain amount of time. Doesn’t replace income.