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Wk 27:EOL:TEST Unit 8 Insurance

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Last updated 23 days ago
25 questions
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What is the primary purpose of insurance?
To increase personal savings through premium payments
To provide guaranteed financial gain
To eliminate financial risk altogether
To transfer financial risk from an individual to an insurance company
Which of the following best defines an insurance deductible?
The amount an insurer pays before coverage begins
The amount a policyholder pays before insurance covers expenses
The total cost of an insurance policy over time
The monthly fee paid for maintaining coverage
Why do health insurance plans typically have co-pays?
To cover the full cost of medical procedures
To allow insurers to waive monthly premiums
To reduce the total deductible amount
To discourage unnecessary medical visits
When determining auto insurance premiums, insurers consider all the following EXCEPT:
Vehicle model
Credit score
Eye color
Driving history
Sasha recently purchased a homeowners insurance policy with a $2,000 deductible. A storm causes $7,500 in damage to the roof. How much will the insurance company pay?
$5,500
$9,500
$7,500
$2,000
Jackson’s car was broken into, and a laptop was stolen. Which insurance policy would most likely cover the loss?
Collision auto insurance
Liability auto insurance
Health insurance
Homeowners or renters insurance
If a health insurance policy has a 20% co-insurance requirement after the deductible is met, how much would a patient owe for a $1,200 hospital bill if they have already met their deductible?
$600
$120
$960
$240
Omar was at fault in a car accident that injured another driver. His auto insurance policy has a bodily injury liability limit of $50,000 per person. If the injured driver sues and wins a $75,000 settlement, how much will Omar’s insurance pay?
$25,000
$100,000
$50,000
$75,000
Which of the following types of insurance is required in nearly every U.S. state for vehicle owners?
Bodily injury liability insurance
Uninsured motorist coverage
Collision insurance
Comprehensive insurance
Evelyn wants to save money on health insurance. Which strategy would likely reduce her monthly premium?
Choosing a high-deductible plan
Enrolling in multiple plans simultaneously
Opting for the lowest deductible available
Selecting a policy with no co-pays
A life insurance policy’s cash value refers to:
The savings component available for withdrawal or loans
The payout beneficiaries receive after the policyholder's passing
The refund available if the policy is canceled
The total amount paid in premiums over time
What is the key benefit of disability insurance?
It replaces lost income due to a disabling injury or illness
It pays for workplace-related injuries only
It provides compensation to an employee after being fired
It covers medical expenses not included in health insurance
Mateo’s apartment was severely damaged by a fire, making it unlivable for a month. His renters insurance includes loss of use coverage. What does this mean?
His policy will cover temporary housing expenses
He will not be responsible for the damage repairs
He will receive a full refund for his destroyed belongings
His insurance will pay his rent until repairs are completed
Which of the following scenarios would be covered by a standard homeowners insurance policy?
Leaky pipes slowly cause mold buildup over three years
Termites destroy the wooden foundation of the home
A small business run from home is sued by a customer
A guest slips on ice in the driveway and breaks their wrist
Harper is 24, single, and has no dependents. Which type of insurance would likely be the lowest priority for them?
Renters insurance
Health insurance
Life insurance
Auto insurance (if they own a car)
In the context of health insurance, what is an out-of-pocket maximum?
The most an insurance company will ever pay for a person’s claims
The highest amount an individual must pay in one billing cycle
The maximum amount a person will pay for covered services in a year
The highest deductible allowed under federal law
Luis wants to switch to a more affordable car insurance policy. What might help lower his premium?
Filing more claims to prove he uses his insurance
Enrolling in a defensive driving course
Reducing his deductible
Increasing his coverage limits
Which of the following statements about umbrella insurance is true?
It covers only flood and earthquake damage
It is required by law in most states
It provides additional liability coverage beyond other policies
It replaces the need for auto or homeowners insurance
Devin’s pet insurance policy has a $500 deductible and reimburses 80% of costs. His dog needed surgery that cost $2,000. How much will the insurance pay?
$1,200
$1,500
$2,000
$1,800
A health insurance marketplace is:
A private insurance company offering discounts on health coverage
A medical service network owned by an employer
A government-run system for comparing and purchasing insurance plans
A directory listing doctors and hospitals in a local area
Which type of insurance is most critical for a self-employed individual with no employer benefits?
Identity theft insurance
Health insurance
Life insurance
Travel insurance
If Jamal’s homeowners insurance has a replacement cost policy rather than an actual cash value policy, what difference does it make?
He will receive double the payout for each loss
His policy will pay enough to replace items at current market prices
His insurance will cover repairs only, not replacements
His payout will be based on the item’s depreciation value
A high-deductible health insurance plan is typically paired with:
A long-term disability plan
A no-copay insurance model
A Health Savings Account (HSA)
An employer-funded pension
Riley is considering purchasing long-term care insurance. This type of insurance helps cover:
Lost income due to a temporary disability
Funeral expenses for policyholders
Emergency hospital visits for chronic illnesses
Nursing home or assisted living facility costs
If someone is found to be a high-risk driver, what is a likely consequence?
Their premiums will be lower due to increased usage
Their auto insurance premium will be higher
They will automatically be denied coverage
They will have their license revoked