Financial Insurance and Economic Concepts

These flashcards cover key terms and concepts related to life insurance, economic indicators, consumer behavior, and financial literacy.

Types of Life Insurance

Term, Whole, and Universal insurance options.

What does standard home insurance cover?

Fire, theft, and certain weather-related damages.

HMO vs. PPO

HMO offers low premiums and requires PCP referrals; PPO has higher premiums and no referrals.

Insurance Premium

The regular payment to keep an insurance policy active.

Comprehensive Coverage in Auto Insurance

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

Pension

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

401(k) Options for Retirement

Target Date funds that align with expected retirement timeframe.

Roth 401(k)

Contributions are deducted from after-tax income; withdrawals are tax-free.

Employer Match in 401(k) Plans

Contribution of employer matching up to a percentage of salary.

Consumer Confidence as Leading Indicator

Helps predict future consumer spending and economic activity.

Effect of Rising Consumer Confidence

Most likely increase in consumer spending.

Rent Control

Regulation that can create a housing shortage in the long run.

Average Savings in 401(k)s

Americans saved approximately 7.1% of their salaries in 2023.

Mandatory Auto Insurance Coverage

Liability Coverage, which covers bodily injury and property damage to others.

Health Insurance Importance

Crucial for protecting financial assets and managing healthcare costs.

Difference Between Defined Contribution and Defined Benefit Plans

Defined contribution plans (like 401(k)s) are funded by employee contributions; defined benefit plans promise a specific payout.

Predatory Loan Characteristics

Feature high-interest rates and targeting vulnerable populations.

Subscription Traps

Increase consumer costs and lead to unintended recurring charges.

Bank Scam Indications

Requests to log in, use scare tactics, and open a link are warning signs.

Loan Costs Over Time

Total repayment includes principal plus interest, which can be significantly higher.

Consumer Awareness Issues

Common problems arise from lack of understanding regarding financial products.

Importance of Seeking Recommendations

Getting trusted referrals can help ensure quality service (like plumbing).