Insurance & Investments

You have a $2,000 loss. Your insurance company pays $1,500 on the claim. The $500 your insurance didn't pay is called the

• co-insurance clause

• hazard clause

• deductible

• premium

Sally took out a $50,000 life insurance policy. The $50,000 amount of coverage is called the

• cash value

• death benefit or face value

• premium value

• annuity value

Generally, the higher deductible on an insurance policy, the

• greater the premium

• lower the premium

• more frequently the premium must be paid

• less frequently the premium must be paid

Debbie owns a store. She's concerned that an injured customer could sue her store. Which type of insurance should Debbie purchase?

• liability

• surety bonds

• life

• health

Sally's health insurance policy requires that she pay the first $500 in medical costs each year before the company will pay her medical bills. This policy provision is the

• co-insurance clause

• annual deductible

• premium

• major medical benefit

Which of the following insurance covers expensive items, such as jewelry?

• homeowners insurance

• renters insurance

• liability insurance

• personal property floater

Insurance is frequently described as a method of "sharing the risk" because the

• risk of loss is shared with the insurance salesperson

• insured can spread the cost over many years

• risk of loss is shared with the government

• insured shares the risk with all the other policy holders

The only type of life insurance that doesn't develop a cash value is

• term

• universal life

• whole life

• variable universal life

When a self-employed person decides to purchase disability insurance it is generally to

• lessen the possibility of becoming injured

• protect against the financial effects of not being able to work

• eliminate the chance of going out of business

• insure that the cost of the injury to others will be reimbursed

Lucy as no insurance. The situation(s) she should consider insuring first are:

• death so her financial obligations are paid

• losses resulting from illness, accident, or disability

• property losses and auto accidents

• auto collision and burglary