EPF 3- Insurance, Investing, and Money Management

Why is "shared risk" good for your insurance costs?

• you share the risk that overall everyone will not use the policy, and this will help to keep your costs lower.

• you share the risk that no one will use the policy but that costs will still go higher the next year you enroll.

• you share the risk that the insurance company will go under and that you will not have coverage.

• you share the risk that the policy will not be enough to cover your needs when you get sick.

Which of the following would NOT increase your insurance premiums?

• being 18

• being male

• having a new car

• driving a long distance

• being female

As your risk increases what happens to your insurance premium?

• it goes up

• it goes down

• it stays the same

• there is no correlation

Qin pays 200 dollars a month to maintain his insurance coverage. He gets sick in September, and has to pay 500 dollars before his insurance will cover anything. He then splits the rest of the bill with the insurance company and pays out another 700 dollars. Finally in order to get his prescription he spends another 20 dollars. In the scenario above which amount is the premium?

• 20

• 200

• 500

• 700

Qin pays 200 dollars a month to maintain his insurance coverage. He gets sick in September, and has to pay 500 dollars before his insurance will cover anything. He then splits the rest of the bill with the insurance company and pays out another 700 dollars. Finally in order to get his prescription he spends another 20 dollars. In the scenario above which amount is the deductible?

• 20

• 200

• 500

• 700

Qin pays 200 dollars a month to maintain his insurance coverage. He gets sick in September, and has to pay 500 dollars before his insurance will cover anything. He then splits the rest of the bill with the insurance company and pays out another 700 dollars. Finally in order to get his prescription he spends another 20 dollars. In the scenario above which amount is the co-payment?

• 20

• 200

• 500

• 700

Which of the following would not reduce the cost of your auto insurance?

• increasing the deductible

• being underinsured

• being overinsured

• installing a security alarm

If you only need life insurance for a set amount of years you are best off getting:

• PPO

• HMO

• whole life

• term life

What circumstances could require a cash value policy on life insurance?

• If a person had a terminal illness

• If a person wanted to take a vacation

• If a person needed to buy a house

• If a person passed away

Why is replacement value more beneficial than cash value?

• with replacement value you are able to purchase the item at today's prices.

• with replacement value you are able to get the original purchase price of the item.

• with cash value you have to negotiate the amount that they will pay to you for the item.

• cash value is more useful than replacement value because you are given its worth.