Insurance Quiz

Your renter's insurance policy costs $20/month and has a $1,000 deductible. A thief breaks into your apartment and steals your $1200 TV set. How much would your insurance company pay? [JUST PUT THE NUMBER]

You cause an accident and injure the other driver. The case goes to trial and there is a verdict to compensate the injured person with $58,000. You have a $75,000 coverage limit per person for Bodily Injury. How much will the insurance company pay? [JUST PUT THE NUMBER]

Frank has an auto policy with a coverage limit of $30,000 and a deductible of $1,000. He gets into an accident and the damages to his car total $6,200. Fortunately, he has collision coverage. How much will Frank need to pay out-of-pocket? [JUST PUT THE NUMBER]

Your health insurance plan has a $20 copay for certain covered prescription medications. You arrive at the pharmacist and pick up your prescription (which is covered under your plan) which has a list price of $75. How much would you pay the pharmacy? [JUST PUT THE NUMBER]

What is an insurance premium?

• Your monthly payment to your insurer, regardless of whether you use any services

• A list of the procedures covered by your insurance carrier

• An added cost you pay in order to receive higher-quality services

• The amount you pay out-of-pocket for a specific procedure or service

When setting your premium, your car insurance company may consider each of the following EXCEPT...

• How many miles you drive per year

• Your age

• Your driving record

• Your height

Why would someone choose to get long term disability insurance even if they already have health insurance?

• Long term disability only covers medical bills, while health insurance will help compensate for lost work with 40-60% of their income

• Long term disability insurance plans can also extend coverage to family members and pets

• Health insurance only covers regular check ups, while long term disability insurance also covers emergencies

• Health insurance only covers medical bills, while long term disability will help compensate for lost work with a percentage of their income

Bruce has 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 a risky idea?

• 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

• 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

• 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

Which term refers to the percentage of covered medical expenses you are responsible for paying after your deductible is met?

• Deductible limit

• Premium

• Out-of-network fees

• Co-insurance

Insurance companies make money by...

• Refusing to pay out claims to policyholders

• Collecting money from the government

• Collecting more in premiums than they need to pay out each year

• Keeping costs low with minimal advertising