Protecting Your Wealth

Test Review

True or False:

  1. A PPO health insurance plan allows individuals a better selection of health care providers, but is more expensive than an HMO.
  2. Basic health insurance policies and Medicare will not cover stays in nursing homes or assisted living centers for very long.
  3. Collision and comprehensive coverage is optional in most states except if you are financing your car in which case you must have this coverage to protect the lender.
  4. Compared to indemnity plans, managed health care plans impose more restrictions on the specific health care providers.
  5. Disability insurance provides coverage to those in a nursing home, assisted living facility, or at home.
  6. Disadvantages of term insurance are that it increases in cost when you renew it and that it has no value when it matures or you discontinue your policy.
  7. Generally, disability income policies with shorter waiting periods have lower premiums.
  8. Health insurance protects net worth by minimizing the chance that you will have to reduce savings or incur debt when you require medical attention.
  9. If your neighbor falls down the steps in your home and sues, you could be held responsible for their injuries.
  10. In most HMO’s, if a person sees a specialist without being referred by the primary care physician, the HMO will not pay for the treatment.
  11. Independent insurance agents are those that work for one particular company.
  12. Insurance can protect your existing net worth and also increase the likelihood that you will be able to increase your net worth in the future.
  13. Insurance protects you against potential financial losses or liability that result from unexpected events.
  14. Life insurance is critical to protect a family’s financial situation in the event that a breadwinner dies.
  15. Medicaid is a government program providing health care for those with low incomes or in need or public assistance.
  16. Medicare is a government health insurance program for those over 65 years of age who can show need for financial assistance.
  17. Medigap insurance, intended to supplement Medicare, is sold and serviced by the federal government.
  18. Most people obtain health insurance through group plans offered by employers.
  19. One of the problems with changing jobs is that you will immediately lose your health insurance and may not be able to get new insurance right away.
  20. Part D of Medicare represents a combination of Part A and Part B provided through private insurance companies.
  21. Technological advances are one of the things helping to keep the cost of health care from escalating further.
  22. The beneficiaries of life insurance policies can only be family members or those directly impacted by a person’s death.
  23. The best disability plans you if you are not able to work at any job, not just your regular job.
  24. The decision to obtain insurance should be determined by weighing its costs and benefits.
  25. Younger drivers, especially males, between the ages of 16 and 25 are more likely to get in accidents, and therefore pay higher insurance premiums.

Multiple Choice

  1. Lessening your expose to an illness by getting periodic health checkups is an example of
  2. Accepting risks
  3. Avoiding risks
  4. Reducing risks
  5. Transferring risks
  6. The comprehensive or collision premium of a Rolls-Royce in relationship to a Chevy
  7. Depends on the state insurance rate in which the car is insured
  8. Is a poor investment
  9. Will be higher because a Rolls-Royce costs more than a Chevy
  10. Will be lower because Rolls-Royce drivers will be more careful
  11. Auto insurance rates are based upon all but your
  12. Age
  13. Driving record
  14. Gender
  15. Height and weight
  16. Which of the following is considered personal property for home insurance coverage?
  17. An automobile
  18. A garage
  19. Furniture
  20. Trees and shrubs
  21. All of the following actions are suggestions to reduce your homeowner’s insurance except
  22. Cost of legal action due to personal liability claims
  23. Fire damage to the building’s roof
  24. Install better locks or a security system
  25. Replacement of personal items such as clothing
  26. Life insurance proceeds are not used to
  27. Fund charities
  28. Fund the policyholder’s retirement
  29. Pay off a mortgage
  30. Support parents or other relatives
  31. ______insurance is life insurance that is provided over a specified time period and does not build cash value.
  32. Term
  33. Whole life
  34. Universal life
  35. Variable life
  36. Term life insurance is
  37. Often available in group policies through employers
  38. Less expensive when you renew it
  39. Pure insurance with no savings feature
  40. Both A and C
  41. Which of the following will not affect the premiums on a term life insurance policy?
  42. Age of the policyholder
  43. Percentage earned on savings portion of premium
  44. Gender of the policyholder
  45. Family medical history of the policyholder
  46. In the ______method, life insurance is determined as a multiple of your annual income.
  47. Income
  48. Asset
  49. Balance sheet
  50. Budget
  51. Which of the following will increase your need for life insurance?
  52. Your spouse graduates from college
  53. You receive a large inheritance
  54. Your only child graduates from college
  55. You get married
  56. Life insurance proceeds are generally not taxable to the
  57. Insured
  58. Beneficiary
  59. Administrator
  60. Benefactor
  61. The cost of health care has risen dramatically in recent years due to all except
  62. People living longer and requiring attention for longer periods of time
  63. Reduced litigation costs
  64. The bureaucratic processes of reimbursement and claim handling
  65. The high cost of technology in health care
  66. Indemnity health plans
  67. Greatly restrict the choice of health care providers
  68. Require you to pay the doctor and then get reimbursed
  69. Require you to get approval to see a specialist
  70. Are the least expensive of all health care plans
  71. Compared to indemnity plans, what is an advantage of managed health care plans?
  72. You will have lower insurance premiums
  73. There are no out of pocket expenses required
  74. You have greater choices of health care providers
  75. They are very efficient in their handling of paperwork
  76. Which of the following statements about an HMO is not true?
  77. You will pay the same monthly premium whether you use the plan or not.
  78. You need to be referred to see a specialist or the HMO will not pay.
  79. Individuals usually pay a small fee for a visit to a physician or for a prescription
  80. The health care providers are compensated on the basis of each visit by a patient
  81. Which of the following is an advantage of a PPO compared to an HMO?
  82. The premiums are lower
  83. There are more choices of specialized health care providers
  84. There are no out of pocket expenses
  85. No approval is needed to see a specialist
  86. ______insurance serves as a backup for expenses not covered by basic health insurance.
  87. Excess hospitalization insurance
  88. Surgical expense insurance
  89. Major medical insurance
  90. Physician expense insurance
  91. An account that allows employees to use pre-tax income to pay for medical expenses is a
  92. Flexible spending account
  93. HMO
  94. Medical savings account
  95. PPO
  96. If a person is diabetic and is applying for a new health care insurance policy, s/he might be most concerned with which of the following?
  97. Cancellation options
  98. Stop loss provision
  99. Preexisting conditions
  100. Deductible
  101. The federal law that allows you to continue health insurance coverage through your former employer’s plan for 18 months after you stop work is
  102. HIPAA
  103. COBRA
  104. Social Security
  105. Medicare
  106. Medicare basic coverage (Part A) covers
  107. Hospital expenses, including surgeries
  108. Outpatient hospital care
  109. Physical therapy
  110. All of the above
  111. The part of medicare that provides coverage for prescription drugs is
  112. Part A
  113. Part B
  114. Part C
  115. Part D
  116. Sources of disability income do not include
  117. Employer disability insurance
  118. Federal disability insurance
  119. Individual disability insurance
  120. Insurance from Social Security
  121. Disability insurance would probably cost the most for which of the following people?
  122. A certified public accountant
  123. An office worker
  124. A construction worker
  125. A telemarketer