Insurance

Front

Which type of insurance is likely to be the lowest priority for a single, working, 24-year-old? Options: Health insurance, Home insurance, Life insurance, Auto insurance

Back

Life insurance

Answer explanation

Life insurance is typically a lower priority for a single, working 24-year-old, as they may not have dependents relying on their income. In contrast, health, home, and auto insurance are more immediately relevant.

Front

The federal agency that oversees insurance companies is

Back

Insurance companies are regulated on a state-by-state basis

Answer explanation

Insurance companies are primarily regulated at the state level, meaning each state has its own laws and regulations governing insurance practices, rather than a single federal agency overseeing them.

Front

What role does insurance play in financial planning?

Back

It guarantees that income and assets are protected

Answer explanation

Insurance plays a crucial role in financial planning by guaranteeing that income and assets are protected against unforeseen events, ensuring financial stability and security.

Front

The out of pocket cost to the insured when a loss occurs is called...

Back

Deductible

Answer explanation

The out of pocket cost to the insured when a loss occurs is called a deductible. This is the amount the insured must pay before the insurance coverage kicks in, distinguishing it from the premium, which is the cost of the policy itself.

Front

A stone hits your windshield. Which type of coverage would likely cover this expense?

Back

Comprehensive

Answer explanation

Comprehensive coverage typically covers damage to your vehicle from non-collision incidents, such as a stone hitting your windshield. Collision coverage applies to accidents with other vehicles, while liability covers damages to others.

Front

Each of these factors impacts your insurance premium EXCEPT... Deductible amount, The vehicle you are insuring, Your credit score, Your income

Back

Your income

Answer explanation

Your income does not directly affect your insurance premium, while factors like deductible amount, the vehicle you insure, and your credit score do influence the cost of your insurance.

Front

Which of the following would lower your car insurance premium?
Options:
Buy a brand new car
Get a higher deductible.
Driving more during the year
Bundle your insurance with other policies

Back

Get a higher deductible.

Answer explanation

Getting a higher deductible means you agree to pay more out of pocket in case of a claim, which reduces the insurer's risk and can lower your premium. The other options generally do not lead to lower premiums.

Front

A policy is a contract between the

Back

Consumer and the insurance company

Answer explanation

A policy is a contract between the consumer and the insurance company, outlining the terms of coverage and obligations. The other options do not accurately represent the contractual relationship involved.

Front

Under current law, until what age can a child stay on their parents' health insurance?

Back

26

Answer explanation

Under current law, a child can stay on their parents' health insurance until the age of 26. This provision allows young adults to remain covered as they transition into adulthood.

Front

Your health insurance copay is

Back

A fixed amount of money you pay each time you use your plan

Answer explanation

A copay is a fixed amount you pay each time you use your health insurance plan, such as for a doctor's visit or prescription. This distinguishes it from other costs like deductibles or premiums.