intro to business -- insurance quiz (property & life)

what is insurance?

what is insurance?

protection against potential loss of money

what is a policy?

agreement between property owner and insurance company

what is a premium?

payment amount to get desired coverage

what is a deductible?

out-of-pocket cost to owner before insurance pays

what is homeowner’s insurance?

coverage that protects your residence and its associated financial risks, such as damage to personal property and injuries to others

what does homeowner’s insurance cover?

• property loss/damage -- hazards & crimes

• liability -- the cost of another person's losses for injuries at your property

what are the 4 types of coverages for property insurance?

1. home, building

2. other structures

3. personal property

4. additional living expenses

what is liability coverage in homeowner’s insurance?

covers visitors on your property

• medical bills

• lost wages

• pain and suffering

• your legal expenses, if sued

• death benefits

what is a personal property floater in additional property insurance?

additional property insurance that covers the damage or loss of a specific item of high value

what is an endorsement (homeowner’s)?

addition of coverage

what are some things homeowner’s insurance won’t cover?

• trampoline

• flooding

• earthquakes

• war

• aggressive dog breeds

what are “acts of God” and are they covered in homeowner’s insurance?

an uncontrollable event, such as tornadoes, not caused nor controlled by humans

and they are NOT COVERED

what is a declarations page (homeowner’s)?

first page of the policy that summarizes what's covered and what's not

what are some factors that affect your premium cost in homeowner’s insurance?

• location

• type of structure

• coverage amount

• policy type

• deductibles

• discounts (bundling)

• claims history

• square footage/# of rooms

• special possessions

• age of the home

• potential hazards

• credit history

what are the 2 personal belongings coverage methods in homeowner’s insurance?

• actual cash value -- payment based on today's worth of the item

  • Replacement cost minus depreciation

• replacement value -- receive full cost for repairing or replacing an item (more expensive and there are limits)

what is included and excluded in renter’s insurance (homeowner’s)?

• includes: personal property protection, additional living expenses, personal liability

• excludes: buildings or other structures

and you are NOT covered under the landlord's policies!

what is life insurance?

provides financial security in the event of one's death

when should you consider buying life insurance?

• buying a home

• having a child

• getting married

what can life insurance cover?

• pay off mortgage/debts

• money for children when they reach a certain age

• pay for children's education

• pay uncovered medical expenses & funeral costs

• provide retirement income

• pay estate and death taxes

what are the 3 parties in life insurance?

• policyholder -- person who takes out the policy and makes policy decisions

• insured -- person whose life is insured

• beneficiary -- person(s) to receive the benefit when the insured died

what is the principle of life insurance?

the more likely a person is to die, the higher the life insurance premium

what is a death benefit in life insurance?

the amount received upon the death of the insured

what are general life insurance cost factors?

• men pay more than women

• older people pay more than younger people

• smokers pay more than non-smokers

  • reckless driving, drinking alcohol, health history, family health history, hobbies, occupation

what does life insurance not cover?

suicide

what are the two types of life insurance?

• term insurance -- protection against loss of life only for a specified term (period of time)

  • when the term ends, the coverage ends

  • less expensive

• whole life insurance -- permanent policy for which you pay a specified premium each year for the rest of your life

  • provide a death benefit and a savings component

  • part of premium paid is put in savings

what is depreciation?

• wear-&-tear

• lowers in cost because of age

what is cash surrender value for whole life insurance (life insurance)?

when/if you cancel the policy, you are entitled to this amount of accumulated savings

when does buying whole life insurance make sense?

• parents with adult child with long-term needs

  • disability -- born

  • disability -- accident

what is a claim?

a request for payment from an insurer by the policyholder for any damages covered by a policy