Understanding Types of Insurance and Economic Concepts

These flashcards cover key concepts about insurance types, economic indicators, and consumer protection principles from the lecture notes.

What are the three types of life insurance?

Term, Whole, and Universal.

Which type of life insurance typically has the lowest premium?

Term Life Insurance.

What does standard home insurance typically cover?

Fire, theft, and certain weather-related damages.

What is the difference between an HMO and a PPO?

HMO requires choosing a primary care physician and referrals; PPO allows more flexibility in seeing specialists.

What is an insurance premium?

The regular payment you make to keep your insurance policy active.

What does comprehensive coverage in auto insurance cover?

Damage to your vehicle from events like hail, vandalism, or theft.

What is a pension?

A regular payment made to a person after retirement, typically funded by an employer or government.

In a Roth 401(k), how are contributions taxed?

Contributions are made with after-tax income.

What is the typical contribution limit for a 401(k) for those under 50?

$22,000.

What is a leading indicator in economics?

Consumer confidence helps predict future consumer spending and economic activity.

What happens when consumer confidence rises significantly?

Increase in consumer spending.

What can happen if rent control is implemented?

It can lead to a shortage in the housing market.

What is one potential concern about generous social welfare programs?

They could discourage labor market participation, slowing income growth.

What is required for liability coverage in auto insurance?

It covers bodily injury and property damage to others in an accident you cause.

What happens to housing prices if the number of sellers increases at the same rate as buyers?

Housing prices will remain roughly the same.

What rights do tenants and community organizers believe rent control provides?

It balances power between renters and landlords.

What issue is shared by subscription traps, extended warranty traps, and predatory loans?

A lack of awareness and understanding on the part of the consumer.

What should a consumer do if they receive a suspicious phone call from their bank?

Hang up and call the bank's fraud line directly.

What is the common mistake made when signing up for free trials?

Assuming you can easily cancel and not reading the terms.

How does comprehensive auto insurance differ from collision insurance?

Comprehensive covers non-collision-related damages; collision covers damages from collisions.

Before committing to a loan, what should a consumer consider?

The total costs and terms of repayment.

What is the potential annual percentage rate (APR) for short-term loans?

Rates can be very high, often exceeding 400%.