Personal Finance Chapter 9

Which of the following is not a recommended way to save on your health insurance premium?

• Increase your stop-loss or your maximum out of pocket expense.

• See if a Health Savings Account would make sense for your situation.

• Increase your deductible.

• If you are young and healthy, you do not need health insurance.

Which of the following would not be a huge financial risk (and, therefore would not require insurance) if you had a full emergency fund of $500 or more?

• A medical emergency

• You lose your cell phone

• A car accident

• Your identity gets stolen

Which of the following types of insurance is not recommended for a young single adult?

• Life insurance

• Identity theft protection

• Auto insurance

• Health insurance

The time between the disabling event and the beginning of payments in your disability coverage is called:

• Elimination period

• Out of pocket

• Stop gap

• Deductible

Which of the following is not a recommended way of lowering your car insurance premiums?

• Shop around

• Drop your auto insurance altogether

• Increase your deductible

• Get good grades and take a driver education class

Life insurance policy for a specific period of time is called:

• Whole life

• Term

• Level

• Universal

The purpose of insurance is to:

• Develop a savings plan

• Provide an investment opportunity

• Transfer financial risk

• All of the above

Which of the following is not a benefit of having a will?

• You only need a will if you have a large estate.

• A well-drafted will can allow your family to minimize death taxes and other costs that may drain your estate of assets.

• A will enables you to nominate the personas who will handle your estate or serve as guardians to your children, and it allows you to determine who will receive all the property you have accumulated over your lifetime

• Your will can be an expression of your personal values

A person becomes self-insured when:

• Their kids are grown, they have no debt, and they have fully funded retirement

• They have no debt

• They own their own business

• Everyone should have term life insurance regardless of age or financial well-being

Which of the following statements about life insurance is true?

• There is no difference between term and cash value life insurance

• You will always need life insurance

• Term life insurance should be avoided because the policy will expire and it has no savings plan built into it

• Cash value insurance is normally for life and is more expensive than term life insurance because it funds a savings plan