MoneyPower: Insurance (11 Questions)

A person buys a flat screen, plasma, theater-like television. The person has homeowner’s insurance. Why would it be appropriate to add a personal property floater to that insurance?

• To reduce the premium on the homeowner’s insurance.

• To protect the person who owns the television from liability for damages.

• To show the insurance company a good faith investment has been made.

• To cover the cost of replacement should the television get damaged or stolen.

A woman has just received a very expensive piece of jewelry. The woman has homeowner's insurance. Which statement would it be most appropriate for her to make to her insurance agent?

• I think I need a personal property floater.

• I think I should get speculative risk insurance.

• I will deduct the cost of the jewelry from my premium.

• I realize that if this jewelry is stolen it will be considered vicarious liability.

For the past five years, a person has had a $20,000 whole life insurance policy that has a cash value clause. The person decides to surrender the policy. At the time of surrender, the person will receive

• one-fifth of the $20,000 face value.

• $20,000 less the premiums paid.

• a calculated amount of money which includes the premiums paid as well as the interest on that money.

• a calculated amount of money that must be converted to a term life insurance policy.

Sally’s health insurance policy requires her to pay the first $500 of medical costs each year before the company will pay any of her medical bills. This policy provision is the:

• Co-insurance clause

• Premium

• Annual deductible

• Major medical benefit

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 injury caused to others will be reimbursed.

Debbie owns a clothing store. She is concerned that a customer who is injured in the store will sue. Which type of insurance should Debbie purchase?

• Social insurance

• Life insurance

• Surety bonds

• Liability insurance

Neil will be traveling by air in Southeast Asia for a six-week vacation. Which step will not provide protection during the trip?

• Buy baggage claim insurance

• Take his passport

• Buy flight insurance

• Buy medical insurance that covers him when he travels internationally

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

• Risk of loss is shared with the insurance company sales person

• Insured shares the risk of loss with all the other policy holders

• Insured can share the risk by spreading the cost over a number of years

• Risk of loss is shared with the government

Gwen receives a bill from her auto insurance company, and she sends a check to the company to make sure her policy is not cancelled. The cost of her policy is called the:

• Co-insurance clause

• Premium

• Deductible

• Exclusion

When Jessie needs health care, she must first go to her primary care physician who coordinates her care and decides whether Jessie should see a specialist. This is an example of:

• Health Maintenance Organization (HMO)

• Preferred Provider Organization (PPO)

• Point of Service (POS)

• Exclusive Provider Organization (EPO)