Insurance quiz

insurance

insurance

an agreement between an individual and an insurer to protect the individual against risk

policy

contract between the individual and the insurer specifying the terms of the insurance arrangements

policyholder

the consumer who purchased the policy

premium

a fee paid to the insurer to be covered under specified terms

deductible

amount paid out of pocket for the initial portion of a loss before the insurance coverage begins

homeowners/renters, automobile, health, disability, long-term care, identity theft protection, and life insurance

types of insurance

auto insurance

arrangement between an individual and an insurer to protect the individual against risk from automobile accidents

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

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

uninsured/underinsured motorist insurance

covers injury or damage to driver, passengers, or vehicle caused by driver with insufficient insurance

physical damage insurance

covers damages caused to the vehicle, two types - collision and comprehensive

collision

covers a collision with another object, car, or from a rollover - hitting a pole with your car

comprehensive

covers all physical damage losses except collision and other specified losses - tree falling on a car

health insurance

provides protection against financial losses resulting from injury, illness, and disability

life insurance

a contract between an insurer and policyholder specifying a sum to be paid to a beneficiary upon the insured's death

beneficiary

recipient of any policy proceeds if insured person dies

dependent

someone who relied on someone else financially

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

peril (homeowner's insurance)

an event that can cause a financial loss from a fire, falling trees, lighting, etc.

property insurance (homeowner's insurance)

protects the insured from financial losses due to destruction or damage to property

liability insurance (homeowner's insurance)

protects the insured from financial losses due to being held liable for other's losses

renter's insurance

protects the insured from loss of the contents of the dwelling rather than the dwelling itself

claim

Paperwork filed with an insurance company in order to get them to cover a loss for someone they insure

coverage

applies to the amount of protection you have through an insurance company in the event of a loss

out-of-pocket expenses

specific amount of money that you pay when insurance only covers a portion of costs

will

a legally enforceable declaration of how a person wishes his or her property to be distributed after death

true

T/F: raising your deductible keeps premiums down

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