Personal Finance Ch. 9 Test

Which of the following would not be a huge financial risk (and, therefore would not require insurance) if you had a full emergency fund of $500 or more?

• You lose your cell phone
• A medical emergency
• Your identity gets stolen
• A car accident

The time between the disabling event and the beginning of payments in your disability coverage is called:

• Deductible
• Out of pocket
• Elimination period
• Stop gap

Life insurance policy for a specific period of time is called:

• Universal
• Level
• Term
• Whole life

The purpose of insurance is to:

• Develop a savings plan
• Transfer financial risk
• Provide an investment opportunity
• All of the Above

Which of the following is not a recommended way of lowering your car insurance premiums?

• Get good grades and take a driver education class
• Drop your auto insurance altogether
• Increase your deductible
• Shop around

Which of the following types of insurance is not recommended for a young single adult?

• Auto insurance
• Identity theft
• Health insurance
• Life insurance

Which of the following types of insurance is not a recommended way to save on your health insurance premium?

• Increase your deductible
• See if a health savings account would make sense for your situation.
• If you are young and healthy, you do not need health insurance
• Increase your stop-loss or your maximum out-of-pocket expense.

A person becomes self-insured when:

• Their kids are grown, they have no debt, and they have fully funded retirement
• They have no debt
• Everyone should have term life insurance regardless of age or financial well-being
• They own their own business

Which of the following is true?

• Any kind of duplicate insurance coverage is a bad idea
• Pet insurance is a good idea since pet emergencies can be very expensive
• You can never be too safe- there is no bad insurance
• Mortgage life insurance is necessary if you are a homeowner

Which of the following statements about long-term care insurance is false?

• You should not buy long-term insurance care insurance until age 30.
• At least 69% of people over the age of 65 will require long-term care at same point.
• Long-term care insurance is not the same as disability or short-term medical care.
• A good long-term care policy will included in-home care.