ALLIED FIN202 MODULE 5 CHECK YOUR UNDERSTANDING

Question Points
1. Which is
a correct statement about life insurance?
a. People are less
apt to actively seek life insurance than health insurance.
b. Private sources
are the only available sources for life insurance.
c. Life insurance is
extremely important if you are single and living alone.
d. There is only one
type of life insurance.
2. Insurance
experts have estimated that extra costs of up to _____________ per year may be
required to replace the services of a homemaker in a family with small
children.
a. $3,000
b. $6,000
c. $10,000
d. $12,000
3. The DINK
method assumes that:
a. you have only two
children.
b. your spouse does
not work.
c. your insurance
needs are complex.
d. your spouse will
continue to work after your death.
4. Your
first step in determining a life insurance program should be to:
a. consult a local
insurance company agent.
b. buy as much life
insurance as you can afford.
c. estimate your
life insurance requirements.
d. determine your
life insurance objectives.
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5. Your
annual income is $50,000. What is your life insurance need based on the easy
method?
a. $245,000
b. $300,000
c. $345,000
d. $400,000
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6. Catherine
Carey has made the choice to stay home and raise her three kids while her
husband works. She wants to determine her insurance need. What method was
specifically designed for someone in her situation?
a. Easy method
b. DINK method
c. Nonworking spouse
method
d. Family need
method
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7. A good
health insurance plan should:
a. provide at least
one year’s hospital room and board in full.
b. provide at least
a $2 million lifetime maximum for each family member.
c. pay 100 percent
for out-of-hospital expenses.
d. offer basic
coverage for hospital and doctor bills.
8. The easy
method of determining life insurance requirements assumes that your family is:
a. rich.
b. poor.
c. typical.
d. young.
9. Jamal
Walker developed a serious infection and spent 6 months in his hospital’s
intensive care unit. What part of his insurance policy would be the most useful
for helping to pay for this?
a. Hospital expense
b. Surgical expense
c. Physician expense
d. Major medical
10. What can
you do to reduce your health care costs?
a. Stay well.
b. Gain a little
extra weight.
c. Smoke and drink.
d. Live dangerously
11. Dean
Thomas has an insurance policy that cannot be cancelled unless he fails to pay
his premium. What provision in his insurance policy would specify this?
a. Eligibility
b. Assigned benefits
c. Benefit limits
d. Guaranteed
renewable
12. Health
insurance includes:
a. life insurance.
b. disability
insurance.
c. personal
liability insurance.
d. an annuity.
13. Which type
of health insurance pays part or all of an insured’s hospital bills for room,
board, and other charges?
a. Surgical expense
b. Hospital expense
c. Physician’s
expense
d. Medicare Part B
14. Which type
of health insurance policy may not cover all of your health insurance needs or
may deny benefits if you lose your job?
a. Group health
b. Individual health
c. Medicare
d. Medicaid
15. Julie
Cumbie is playing softball and gets hurt sliding into second base. She gets an
x-ray at her doctor’s office to make sure her ankle isn’t broken. Which part of
her basic insurance coverage should help pay for this x-ray?
a. Hospital expense
b. Surgical expense
c. Physician expense
d. Major medical
16. Joe
Johnson needs surgery for appendicitis. Which part of his basic insurance
coverage should help pay for this surgery?
a. Hospital expense
b. Surgical expense
c. Physician expense
d. Major medical
17. A
two-earner couple likely will have:
a. the greatest need
for life insurance.
b. no need for life
insurance.
c. a moderate need
for life insurance, especially if they have a mortgage.
d. the greatest need
for an annuity.
18. Each year,
Sophie Bennett must pay $500 for doctor’s visits before her insurance company
will make any payments for doctor’s visits. What is this requirement called?
a. Coordination of
benefits
b. Deductible
c. Coinsurance
d. Stop-loss
provision
19. Which
country has the highest per capita medical expenditures of any industrialized
country in the world?
a. Australia
b. Britain
c. Canada
d. U.S.A.
20. Who has
the greatest need for life insurance?
a. Households with
small children
b. Singles living
alone
c. Singles living
with parents
d. Dual income
couples