Insurance Quiz

Lula has an accident and illness pet insurance policy. Her dog steps on a mouse trap and needs his first vet services of the year, totaling $800. The deductible is $1000. Which of the following is correct?

• Lula pays $800, the insurance pays $0

• Lula pays $600, the insurance pays $200

• Lula pays $200, the insurance pays $600

• Lula pays $0, the insurance pays $800

Which BEST describes what is meant by a health insurance marketplace?

• A federal- or state-run website with the individual health insurance plans available in a given state

• An online directory that lists doctor and hospital contact information

• The portal you use to register for employer-sponsored group plans

• Any doctor's office or hospital that shares a physical location with other medical providers

Your health insurance plan has a $20 copay for certain covered prescription medications. You arrive at the pharmacist and pick up your prescription which has a list price of $75. How much would you pay the pharmacy?

• $20

• $0 since health insurance plans waive the cost of prescription drugs

• $55

• $75

Insurance companies charge individuals different prices for coverage depending on risk levels. They collect everyone's monthly premiums together and use the money to make payments when people file a claim. This is

• Risk pooling

• Comprehensive coverage

• Underwriting

• Risk management

Which of the following insurance coverage options would be the lowest priority for a typical single person, with no children, 1-2 years out of high school?

• Life Insurance

• Health Insurance

• Auto Insurance (if they have a car)

• Renter's Insurance (if they are renting an apartment)

Finn moves from a rented apartment into his very first house. What should he expect regarding the cost of homeowners insurance compared to renters insurance?

• His homeowners insurance will be MORE expensive than his renters insurance was

• He will not need homeowners insurance, because owning a home is less risky than renting

• His homeowners insurance will be LESS expensive than his renters insurance was

• His homeowners insurance will be the same cost as his renters insurance was

In general, how do insurance companies decide how much to charge an individual for their monthly premiums?

• The company assesses the individual's risk factors and assigns higher premiums to higher risk individuals

• The company looks at the individual's tax filings from the previous year to assess overall wealth and ability to pay

• The company charges the same premium for every individual eligible for coverage

• The company increases or decreases premium rates based on the stock market

Your parents tell you that on your 22nd birthday, they want you to get your own health insurance. You are healthy, do not take any prescriptions, and only see a doctor for your annual physical. What type is best?

• A high deductible plan with a low monthly premium

• A low deductible plan with a high monthly premium

• Your parents MUST keep you on their plan. They cannot legally remove you.

• You do not need health insurance because you are healthy

Bruce just graduated from college and decides that instead of paying for insurance, he'll work on building up his emergency fund. This way, if something goes wrong, he can just pay for it using cash. Why is this risky?

• An accident or illness can strike at any time and be quite expensive, so it's possible he'd need a big sum of money well before his emergency fund was large enough

• It is mandatory to have auto, health, life, disability, and renters/home insurance, so he'll have to pay 5 penalties per year for not enrolling in these insurance types

• Having insurance not only protects you financially, but also physically, so he'll be less likely to experience illness or accident if he has insurance

• The sooner he starts paying for insurance, the sooner he will reach his maximum lifetime requirement and can stop paying altogether for coverage

A standard renters insurance policy would cover each of the following EXCEPT

• A new window when a baseball breaks the original one

• A small TV and some sneakers, stolen in a robbery

• A lawsuit brought when a visitor hits their head on a low hanging light fixture

• A week of hotel reservations when the tenant has to move out due to fire damage