Chapter 10 Study Guide - Home and Property Insurance
1. What does Homeowners Insurance cover and why is it important to have?
It covers damage to your home, assets, personal belongings, and property. It is important to
have because if anything ever were to happen to those things, homeowners insurance would
cover for your loss.
2. Give an example of why people need Liability coverage?
If you were to accidentally back up into someone's car, Liability coverage protects you from
your mistake.
3. What is an umbrella policy?
Umbrella policy applies when a liablility exceeds the limits of other policies.
4. When does it make sense to obtain Renter’s Insurance?
It makes sense to obtain Renter's insurance when you feel you have a lot of things worth
protecting.
Auto Coverage
5. In reference to auto insurance, what do each of these numbers mean 100/300/50?
1st amount: Coverage per person for bodily injury, including death that you cause to others
2nd amount: Cost of the accident
3rd amount: Property damage
Chapter 11 – Health, Disability & Long-term Care Insurance
1. Define these terms:
Premium - An amount to be paid to an insurance policy
Deductible - The amount you pay for covered health care services before your insurace pays
Coinsurance - A potion of the medical cost you pay after your deductible has been met
Stop Loss Protection (Max out of Pocket) - Excess risk coverage that provides protection for
the employer.
2. Watch the video in eLearn (Deductibles and Coinsurance). Understand how to calculate how
much someone will need to pay out of pocket given a similar situation.
3. How can using a Preferred Provider reduce out-of-pocket expenses?
PPOs offer discounted fee schedules for health care providers in exchange for a guaranteed
number of customers, who receive lower out-of-pocket expenses for services with a co-
payment.
4. What is a Flexible Spending Account (FSA)? What is the benefit of putting money into one of
these accounts? If you don’t use these funds on health expenses during a specific period of
time, do you typically lose this money?
It is an account that you put money into to save for out-of-pocket expenses in the future. The
benefit is that you don't pay taxes on this money. If you don't use the money you will lose it
all.
5. What is a Health Saving Accounts (HSA)? Who can contribute to a HSA? What is the benefit of
putting money into one of these accounts?
A savings account that you put money into to pay for qualified medical expenses. The benefit
is that you can use untaxed dollars to pay for medical related things.
6. What is Disability Insurance and why is it important to have?
A disability insurance protects you if you ever get an injury that stops you from earning
money. It is important to have because you income is the most important thing you have, and
you need to protect it.
7. Are follow following statements True or False.
Most people over 65 are eligible for Medicare. (T/F)
Medicare pays for inpatient hospital care after a deductible is met. (T/F)
Medicare typically covers care in a skilled nursing home for more than 100 days during a benefit
period. (T/F)
Medicare pays for in-home private caregivers. (T/F)
Medicaid provides medical assistance to low-income individuals. (T/F)
Medicaid typically covers care in a skilled nursing home for more than 100 days during a benefit
period. (T/F)
Chapter 12 - Life Insurance
1. When should someone have life insurance coverage?
A person should consider life insurance coverage when they have loved ones they want to
protect financially in case of unexpected death.
2. What is the Easy Method of determining Life Insurance needs (as outlined in the book).
Ask yourself the question: Do you have people you need to protect financially? (Parents,
childeren, spouse)
3. What are the advantages and disadvantages of Term Life Insurance and Whole Life
Insurance? Which is less expensive?
Term Life Insurance: The advantages are low monthly payments. The disadvantage is the
limited number of years it lasts for.
Whole Life Insurance: The advantages are that it lasts for your whole life. The disadvantages
are that it is really expensive and only some money goes to your family in the end.
4. According to Clark Howard article in eLearn,
What type of life insurance policy should the majority of people purchase and why?
Majority of people should purchase term life insurance because it is the more affordable one.
Whole Life Insurance is only a good choice if you have income greater than how much?
$400,000
5. Kiplinger Article - Insurance Rates
According to the article in eLearn, what factors can influence insurance rates?
Many factors influence interest rate including your credit score, your home's claim history,
your car's horsepower, your driving record, your colleagues, your weight, your education and
job, your family's health, your zip code, and even your hobbies.