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WorksheetsBusiness Law = Ch. 19 - insurance
Total questions: 31
Worksheet time: 27mins
The total cost of buying insurance, usually per year
Premium
coverage
deductible
policy
What is the main purpose of insurance?
to follow the law
To reduce danger risk
For investment purposes
To reduce financial risk
This type of insurance should pay if you severely burn your finger on a toaster and need to go to the hospital
Life
Health
Product
Homeowners
This type of insurance should pay for damages if a tree that goes through your roof.
Product
Health
Homeowners
Life
This is what you have to pay before the insurance company will pay anything
coverage
dues
deductible
policy
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
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?
$0
$17,000
$58,000
$75,000
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
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?
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
His homeowners insurance will be MORE expensive than his renters insurance was
Which of the following can renters insurance liability coverage protect you against?
An at fault auto accident in the parking lot outside your apartment building
Accidental bodily injury suffered by someone who is a guest at your home
Intentional damage you have done to someone else's property
Loss of your property in a fire
Renters insurance personal property coverage does not include which of the following?
Clothing
Furniture
Automobiles
Electronic Equipment
How do deductibles affect claim payouts?
They don't
Deductibles are added to payouts
Deductibles are subtracted from payouts
None of the above
_________ _________ insurance is a combination of a life insurance policy & a savings acct; it covers the insured for his or her lifetime and any amt the insured pays over the minimum premium goes into an investment acct that earns interest
traditional plan
whole life
term life
universal life
_______ _________ insurance also known as permanent life insurance, offers financial protection for your entire life
term life
whole life
universal life
life
The __________ is the person who receives money from a life insurance policy if the insured dies
beneficiary
life
deductible
health
_______ ________ insurance is for a specified term, such as 5 years, or to a specified age
universal life
term life
cash value
whole life
Explain the difference between term life insurance and whole life insurance.
Term life insurance can be cashed out at any time, while whole life insurance cannot.
Term life insurance provides coverage for a specific illness, while whole life insurance provides coverage for all illnesses.
Term life insurance is more expensive than whole life insurance.
Term life insurance provides coverage for a specific period of time, while whole life insurance provides coverage for the entire life of the insured.
Describe the factors to consider when choosing a life insurance policy.
Coverage amount, premium cost, policy type, financial stability of the insurance company, additional riders or benefits
Color of the insurance company's logo
Number of employees at the insurance company
Distance from the insurance company's office to your home
How does term life insurance differ from whole life insurance?
Cash value
Premium amount
Investment component
Coverage period
Explain the significance of having life insurance.
Life insurance is only for wealthy individuals
Life insurance guarantees a long and healthy life
Life insurance provides financial protection to your loved ones.
Life insurance is a good investment for retirement
Why is it important to carefully consider the type of life insurance policy to purchase?
To ensure adequate coverage and benefits for loved ones
To have a policy that is difficult to understand
To make the process more complicated
To limit the benefits for loved ones
A formal request to an insurance company asking for a payment when the policyholder has an accident, illness or injury is called a(n)______.
emergency savings
coverage
claim
employee benefits
What is the primary benefit of having health insurance?
To avoid paying taxes
To ensure access to medical care without financial burden
To increase your credit score
To get discounts on gym memberships
What is the role of a beneficiary in a life insurance policy?
To pay the premiums
To receive the policy benefits upon the insured's death
To manage the insurance company
To determine the policy terms
Bentson’s house was covered by an extensive fire insurance policy. One day Bentson had a grease fire in his kitchen. Thanks to the quick response of the fire department, the only damage from the fire itself was to the stove. However, several windows were broken by the fire department and much of the home’s furnishings were damaged by water and smoke
Bentson’s house suffered damage from a grease fire and water from the fire department. Which of the following is NOT likely covered by his fire insurance policy?
Damage to the stove only
Broken windows caused by the fire department
Damage to furnishings from water and smoke
Damages to the stove & surrounding cabinets
Bentson’s house was covered by an extensive fire insurance policy. One day Bentson had a grease fire in his kitchen. Thanks to the quick response of the fire department, the only damage from the fire itself was to the stove. However, several windows were broken by the fire department and much of the home’s furnishings were damaged by water and smoke. Bentson’s house suffered damage from a grease fire and water from the fire department. What type of damage is typically excluded from fire insurance policies?
Fire damage to appliances
Water damage from firefighting efforts
Damage resulting from negligence
Damage caused by smoke
Your grandfather is retired and has taken out a large mortgage against his home to support his
lifestyle. Your father, who grew up in the home, wants to take out life insurance on your grandfather to pay off the mortgage rather than let the loan company take the property when your grandfather dies. Can your father do so?
No, they are not married
Yes, but only if your grandfather consents.
Yes, because he is the son and has a right to take out insurance.
No, because life insurance cannot be taken out on someone over 70 years old.
Olivet, owner of an appliance store, had a coinsurance fire policy requiring her to insure 80% of her inventory value. Her inventory was valued at $100,000 when a fire totally destroyed it, and her policy had a face value of $80,000. How much will the insurance company pay for the $100,000 loss?
$80,000
$100,000
$0
$20,000
Which type of insurance is designed to cover damages to your vehicle caused by events other than collisions, such as theft or natural disasters?
Liability insurance
Collision insurance
Comprehensive insurance
Personal injury protection
What is the primary purpose of having renters insurance?
To cover the cost of rent
To protect personal property and provide liability coverage
To insure the building structure
To pay for utilities
