Understanding Insurance

ohn is a new construction worker. Like most new construction workers, he gets assigned the most menial and dangerous jobs, and he gets injured frequently. He hasn't been injured seriously, but he thinks it's time he got some health insurance, "just in case."

When he asks you what features he should have in his health insurance plan, which one of the following would you tell him not to include in the plan?

• High deductibles

• Low Premiums

• Group Policies

• Disability Insurance

While driving to the store, you swerved to miss a dog and drove into a tree. You, the dog, and the tree are alright, but it's obvious that it will cost several thousand dollars to fix your new car. You have insurance, but you didn't really read your policy.

When you pull out your policy, what type of coverage are you hoping to see on it?

• Liability Insurance

• Uninsured motorist

• Underinsured motorist

• Collision

According to NEFE, ___________ means that you use various ways to deal with potential personal or financial loss.

• Prior Planning

• Financial Planning

• Fiscal Olanning

• Risk Management

____________ is protection against large-scale financial loss, according to the NEFE program.

• Credit

• Betting

• Deductible

• Insurance

According to NEFE, what is a "deductible"?

• Any amount you withdraw from your checking account

• The amount of the loss you must pay out of your own pocket before an insurance company begins to reimburse you for a large loss

• What an insurance company will pay you for a large loss

• The replacement value of an item such as a home or car

T or F: According to the NEFE program, any time someone else is dependent on your income to help pay their bills, you need life insurance coverage.

• True

• False

Compensation for specific potential future losses in exchange for a periodic payment

• What is a deductible?

• What is insurance?

• What is an insurance premium?

• What is risk management?

The process of analyzing exposure to risk and determining how to best handle such exposure

• What is a deductible?

• What is insurance?

• What is an insurance premium?

• What is risk management?

The periodic payment made on an insurance policy

• What is a deductible?

• What is insurance?

• What is an insurance premium?

• What is risk management?

The amount of a loss that an insurance policy holder has to pay out-of-pocket before reimbursement begins

• What is a deductible?

• What is insurance?

• What is an insurance premium?

• What is risk management?