Insurance quiz

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28 Terms

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insurance
an agreement between an individual and an insurer to protect the individual against risk
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policy
contract between the individual and the insurer specifying the terms of the insurance arrangements
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policyholder
the consumer who purchased the policy
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premium
a fee paid to the insurer to be covered under specified terms
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deductible
amount paid out of pocket for the initial portion of a loss before the insurance coverage begins
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homeowners/renters, automobile, health, disability, long-term care, identity theft protection, and life insurance
types of insurance
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auto insurance
arrangement between an individual and an insurer to protect the individual against risk from automobile accidents
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liability insurance
covers the insured if injuries or damages are caused to other people or their property; minimum amount of insurance required by law for automobiles
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medical payment insurance
covers injuries sustained by the driver of the insured vehicle or any passenger regardless of fault; also covers insured family members injured as passengers in any car or if they are injured on foot as a pedestrian/bicycling
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uninsured/underinsured motorist insurance
covers injury or damage to driver, passengers, or vehicle caused by driver with insufficient insurance
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physical damage insurance
covers damages caused to the vehicle, two types - collision and comprehensive
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collision
covers a collision with another object, car, or from a rollover - hitting a pole with your car
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comprehensive
covers all physical damage losses except collision and other specified losses - tree falling on a car
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health insurance
provides protection against financial losses resulting from injury, illness, and disability
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life insurance
a contract between an insurer and policyholder specifying a sum to be paid to a beneficiary upon the insured's death
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beneficiary
recipient of any policy proceeds if insured person dies
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dependent
someone who relied on someone else financially
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disability insurance
replaces a portion of one's income if they become unable to work due to illness or injury; usually 60-70% of one's full time wage
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peril (homeowner's insurance)
an event that can cause a financial loss from a fire, falling trees, lighting, etc.
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property insurance (homeowner's insurance)
protects the insured from financial losses due to destruction or damage to property
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liability insurance (homeowner's insurance)
protects the insured from financial losses due to being held liable for other's losses
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renter's insurance
protects the insured from loss of the contents of the dwelling rather than the dwelling itself
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claim
Paperwork filed with an insurance company in order to get them to cover a loss for someone they insure
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coverage
applies to the amount of protection you have through an insurance company in the event of a loss
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out-of-pocket expenses
specific amount of money that you pay when insurance only covers a portion of costs
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will
a legally enforceable declaration of how a person wishes his or her property to be distributed after death
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true
T/F: raising your deductible keeps premiums down
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break-even analysis
method used to evaluate the wisdom of a financial decision by determining the length of time it will take for the costs of the decision to be recouped