Succeeding in the World of Work

Chapter 22: Buying Insurance

Buying Insurance


1.	What is the term for a person who has purchased an insurance policy?
		A)	policyholder
		B)	insuree
		C)	beneficiary
		D)	covered person


2.	What does an insurance policy explain?
		A)	who is covered by the policy
		B)	the types of losses for which the company will pay
		C)	the cost of the insurance
		D)	all of the above


3.	What is the term for losses or risks that an insurance policy will not cover?
		A)	deductions
		B)	deductibles
		C)	premiums
		D)	exclusions


4.	What should you do after you are involved in an automobile accident that causes damage to your vehicle?
		A)	pay a premium
		B)	make a claim
		C)	cash in your insurance policy
		D)	enjoy an exclusion


5.	What is one way to control the cost of insurance?
		A)	know what type of insurance you want
		B)	call several companies to compare costs
		C)	don't buy more coverage than you need
		D)	all of the above


6.	Home insurance generally covers losses due to which of the following incidences?
		A)	earthquake
		B)	flood
		C)	fire
		D)	all of the above


7.	If you run a red light and injure someone in another car, your insurance policy will cover the damages if you have what type of insurance?
		A)	liability insurance
		B)	comprehensive insurance
		C)	collision insurance
		D)	uninsured motorist insurance


8.	Which of the following is not the right thing to do if you are involved in an auto accident?
		A)	check to see whether anyone has been injured
		B)	report the accident to the police
		C)	report the accident to the DMV
		D)	leave the scene quickly


9.	What is the term for medical insurance that requires the payment of a deductible and coinsurance?
		A)	major medical coverage
		B)	medical payments coverage
		C)	deductible-inclusive coverage
		D)	PPO


10.	What is a benefit of a health maintenance organization?
		A)	low cost
		B)	unlimited choice of physicians
		C)	unlimited access to medical care
		D)	low deductibles


11.	What is disability insurance?
		A)	insurance that covers people who have fatal diseases or conditions
		B)	insurance that pays a percentage of a person's salary if he or she is unable to work
		C)	life insurance
		D)	insurance that is offered through preferred provider organizations


12.	What is the difference between term life insurance and cash-value life insurance?
		A)	cash-value pays a defined amount to beneficiaries if the policyholder dies; term life insurance pays a flexible benefit if the policyholder dies
		B)	cash-value life insurance is less costly; term life insurance is expensive
		C)	cash-value life insurance is part insurance and part investment; term life insurance has no cash value
		D)	there is no difference


13.	Which of the following people should purchase life insurance?
		A)	a married man whose wife does not work
		B)	a single mother with two children
		C)	a husband and wife who both work and who have one child
		D)	all of the above


14.	What does the “gatekeeper system” mean in reference to HMOs?
		A)	you must choose a primary care doctor and can only see a specialist through a recommendation from your doctor
		B)	the HMO makes all medical decisions
		C)	a person must have approval from the HMO before he or she can be admitted to the hospital
		D)	the insurance company puts financial considerations before medical considerations


15.	What is the term for insurance that protects you against drivers who do not have liability insurance?
		A)	reverse liability insurance
		B)	uninsured motorist insurance
		C)	collision insurance
		D)	comprehensive insurance