TEST: Unit 13 Insurance

Last updated 23 days ago

25 questions

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Be sure to have completed the lessons for the Unit required for this Test.

Be sure to have completed the lessons for the Unit required for this Test.

What is an insurance premium?

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

A list of the procedures covered by your insurance carrier

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

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

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

Premium

Out-of-network fees

Deductible limit

Co-insurance

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 height

Your driving record

Insurance companies make money by...

Keeping costs low with minimal advertising

Collecting money from the government

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

Refusing to pay out claims to policyholders

Which of the following statements is TRUE about auto insurance premiums?

Auto insurance premiums are a fixed price across all insurance companies

If you have an auto insurance policy and don't get into a car accident or file any claims for a year, you get your premiums back from the insurance company

If you have an auto insurance policy and get into multiple accidents within one year, your premium amount will increase

If you have an auto insurance policy and get into multiple accidents within one year, your premium amount will decrease

Your renter's insurance policy costs $20/month and has a $1,000 deductible. A thief breaks into your apartment and steals your $800 TV set. How much would your insurance company pay?

$0

$800

$200

$1,000

Someone broke into Sam’s car by smashing the passenger window. Which type of auto insurance coverage will help cover the cost to get the window replaced?

Property liability

Collision

Bodily injury liability

Comprehensive

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

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

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?

$75,000

$17,000

$58,000

$0

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?

$0

$30,000

$1,000

$6,200

Each of these is considered an "out-of-pocket" expense EXCEPT…

Excess bills from a car accident once you've gone over your maximum coverage limit

A $1000 deductible if you're in an auto accident

Your monthly premium

A copay of $15 to fill a prescription

Medicaid generally provides insurance for which of the following groups of people?

The elderly or disabled

Individuals in low-income households

Anyone who wants to buy coverage from the Marketplace

Employees who have a government position

Your employer offers an employer-sponsored health insurance plan. Which of the following statements is TRUE?

Your health insurance premiums will be paid directly from your paycheck, pre-tax

Your employer cannot fire you if you get sick or injured because you have employer-sponsored health care

You can remain on that health insurance plan even if you switch jobs

You can only see doctors who are also employees of the same company

Which person will probably have the MOST expensive health insurance premiums?

Patty, who works as an administrative assistant for an employer with a group plan

Samantha, a widow who is eligible for Medicare

Robin, a high earning business owner who buys a plan for their whole family on the Marketplace

Julian, who has 3 children and is eligible for Medicaid

What type of auto insurance are you required to carry in almost every state (49 out of 50)?

Insurance in case you get into an accident with someone who does not have insurance

Insurance if you cause injury to yourself

Insurance if you cause injury to another person

Insurance if you damage your own property

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

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

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

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

Your parents tell you that on your 22nd birthday, they would like for you to get your own health insurance. You are very healthy, are not taking any prescription medicines, and generally only see your doctor for your annual physical. What type of health insurance is likely to be best for you?

You do not need health insurance because you are healthy

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

A low deductible plan with a high monthly premium

A high deductible plan with a low monthly premium

Insurance companies operate by charging individuals different prices for coverage depending on their risk levels. Then, they collect everyone's monthly premiums together and use the money to make payments when people file a claim (for example, someone is in an auto accident or needs to see a doctor). This concept is known as…

Risk pooling

Risk management

Comprehensive coverage

Underwriting

What does the actuarial value of a plan represent?

The financial strength of the insurance company offering the plan.

The deductible amount for the plan.

The average premium cost of the plan.

The percentage of total covered healthcare expenses paid by the plan.

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

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

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

What is the primary source of funding for Social Security?

Sales tax

What is the primary source of funding for Social Security?

State income tax

Payroll taxes (FICA)

Your friend Drucella borrowed your car for the weekend while hers was in the shop. She violated a "No Right on Red" signal and collided with another car. What is the likely consequence since Drucella was at fault?

You, as the owner of the car, will be held responsible for the damages.

Drucella will receive a warning and points on her driver's license.

The other driver's insurance will cover the damages, and Drucella may face a claim against her insurance.

Drucella's insurance will cover the damages to both cars.

Which of the following statements about choosing between an employer-sponsored healthcare plan and an individual healthcare plan is TRUE?

Individual healthcare plans are usually more cost-effective for individuals than employer-sponsored plans.

Employer-sponsored healthcare plans generally have stricter eligibility requirements compared to individual plans.

Individual healthcare plans typically offer more comprehensive coverage options than employer-sponsored plans.

Opting into an employer-sponsored healthcare plan often involves higher premiums compared to individual plans.

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 MORE expensive than his renters insurance was

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

If your car is broken into, and you need to replace the windows, what type of coverage must you have for the insurance company to cover the repair costs?

Personal injury protection (PIP) coverage

Liability coverage

Collision coverage

Comprehensive coverage

What is an insurance premium?

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

A list of the procedures covered by your insurance carrier

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

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

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

Premium

Out-of-network fees

Deductible limit

Co-insurance

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 height

Your driving record

Insurance companies make money by...

Keeping costs low with minimal advertising

Collecting money from the government

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

Refusing to pay out claims to policyholders

Which of the following statements is TRUE about auto insurance premiums?

Auto insurance premiums are a fixed price across all insurance companies

If you have an auto insurance policy and don't get into a car accident or file any claims for a year, you get your premiums back from the insurance company

If you have an auto insurance policy and get into multiple accidents within one year, your premium amount will increase

If you have an auto insurance policy and get into multiple accidents within one year, your premium amount will decrease

Your renter's insurance policy costs $20/month and has a $1,000 deductible. A thief breaks into your apartment and steals your $800 TV set. How much would your insurance company pay?

$0

$800

$200

$1,000

Someone broke into Sam’s car by smashing the passenger window. Which type of auto insurance coverage will help cover the cost to get the window replaced?

Property liability

Collision

Bodily injury liability

Comprehensive

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

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

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?

$75,000

$17,000

$58,000

$0

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?

$0

$30,000

$1,000

$6,200

Each of these is considered an "out-of-pocket" expense EXCEPT…

Excess bills from a car accident once you've gone over your maximum coverage limit

A $1000 deductible if you're in an auto accident

Your monthly premium

A copay of $15 to fill a prescription

Medicaid generally provides insurance for which of the following groups of people?

The elderly or disabled

Individuals in low-income households

Anyone who wants to buy coverage from the Marketplace

Employees who have a government position

Your employer offers an employer-sponsored health insurance plan. Which of the following statements is TRUE?

Your health insurance premiums will be paid directly from your paycheck, pre-tax

Your employer cannot fire you if you get sick or injured because you have employer-sponsored health care

You can remain on that health insurance plan even if you switch jobs

You can only see doctors who are also employees of the same company

Which person will probably have the MOST expensive health insurance premiums?

Patty, who works as an administrative assistant for an employer with a group plan

Samantha, a widow who is eligible for Medicare

Robin, a high earning business owner who buys a plan for their whole family on the Marketplace

Julian, who has 3 children and is eligible for Medicaid

What type of auto insurance are you required to carry in almost every state (49 out of 50)?

Insurance in case you get into an accident with someone who does not have insurance

Insurance if you cause injury to yourself

Insurance if you cause injury to another person

Insurance if you damage your own property

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

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

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

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

Your parents tell you that on your 22nd birthday, they would like for you to get your own health insurance. You are very healthy, are not taking any prescription medicines, and generally only see your doctor for your annual physical. What type of health insurance is likely to be best for you?

You do not need health insurance because you are healthy

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

A low deductible plan with a high monthly premium

A high deductible plan with a low monthly premium

Insurance companies operate by charging individuals different prices for coverage depending on their risk levels. Then, they collect everyone's monthly premiums together and use the money to make payments when people file a claim (for example, someone is in an auto accident or needs to see a doctor). This concept is known as…

Risk pooling

Risk management

Comprehensive coverage

Underwriting

What does the actuarial value of a plan represent?

The financial strength of the insurance company offering the plan.

The deductible amount for the plan.

The average premium cost of the plan.

The percentage of total covered healthcare expenses paid by the plan.

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

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

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

What is the primary source of funding for Social Security?

Sales tax

What is the primary source of funding for Social Security?

State income tax

Payroll taxes (FICA)

Your friend Drucella borrowed your car for the weekend while hers was in the shop. She violated a "No Right on Red" signal and collided with another car. What is the likely consequence since Drucella was at fault?

You, as the owner of the car, will be held responsible for the damages.

Drucella will receive a warning and points on her driver's license.

The other driver's insurance will cover the damages, and Drucella may face a claim against her insurance.

Drucella's insurance will cover the damages to both cars.

Which of the following statements about choosing between an employer-sponsored healthcare plan and an individual healthcare plan is TRUE?

Individual healthcare plans are usually more cost-effective for individuals than employer-sponsored plans.

Employer-sponsored healthcare plans generally have stricter eligibility requirements compared to individual plans.

Individual healthcare plans typically offer more comprehensive coverage options than employer-sponsored plans.

Opting into an employer-sponsored healthcare plan often involves higher premiums compared to individual plans.

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 MORE expensive than his renters insurance was

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

If your car is broken into, and you need to replace the windows, what type of coverage must you have for the insurance company to cover the repair costs?

Personal injury protection (PIP) coverage

Liability coverage

Collision coverage

Comprehensive coverage