6-2 Insurance - Flashcard Lesson 1

Front

The amount paid by a policyholder to an insurance company to obtain or maintain an insurance policy.

Back

Premium

Front

This is a dollar figure, usually a flat dollar amount (e.g., $200 or $500), that an insured person must pay out-of-pocket before an insurance policy reimburses him or her for the remainder of a loss.

Back

Deductible

Front

The purpose of insurance is to ...

Back

transfer risk

Front

Probability as it relates to insurance

Back

means the chance of something happening

Front

One of your parents’ friends says he’s had automobile insurance for 20 years and never been in an accident, so he has never collected on his insurance. He believes he is entitled to get all of his premiums returned. Do you agree?

Back

NO

Front

If you get into an accident or if there is a disaster, your insurance will always pay for all the damage.

Back

FALSE

Front

Monthly insurance payments are called deductibles.

Back

FALSE

Front

If your house or car is damaged, you must file a claim with your insurance company in order to be paid.

Back

TRUE

Front

Raising your deductible may be a good option when it comes to lowering your premium, but it is important to do a break-even analysis before making that decision. TRUE or FALSE?

Back

TRUE

Front

Which of the following would not be a huge financial risk (and, therefore would not require insurance) if you had an emergency fund of $1000 or more? A Car Accident, A Broken Cell Phone, A Medical Emergency, Stolen Identity

Back

A Broken Cell Phone