Quiz about Insurance Premium Quiz

Question 1

What is an insurance premium?

Accepted Answer

Your monthly payment to your insurer, regardless of whether you use any services

Answer

A list of the procedures covered by your insurance carrier

Answer

An added cost you pay in order to receive higher-quality services

Answer

The amount you pay out-of-pocket for a specific procedure or service

Question 2

Which term refers to the percentage of covered medical expenses you are responsible for paying after your deductible is met?

Accepted Answer

Co-insurance

Answer

Deductible limit

Answer

Premium

Answer

Out-of-network fees

Question 3

When setting your premium, your car insurance company may consider each of the following EXCEPT...

Accepted Answer

Your height

Answer

How many miles you drive per year

Answer

Your age

Answer

Your driving record

Question 4

Which of the following statements is TRUE about auto insurance premiums?

Accepted Answer

If you have an auto insurance policy and don't get into a car accident or file any claims for a year, you get your premiums back from the insurance company.

Answer

If you have an auto insurance policy and get into multiple accidents within one year, your premium amount will decrease.

Answer

Auto insurance premiums are a fixed price across all insurance companies.

Answer

If you have an auto insurance policy and get into multiple accidents within one year, your premium amount will increase.

Question 5

Your renter's insurance policy costs $20/month and has a $1,000 deductible. A thief breaks into your apartment and steals your $800 TV set. How much would your insurance company pay?

Accepted Answer

$800

Answer

$0

Answer

$200

Answer

$1,000

Question 6

Someone broke into Sam's car by smashing the passenger window. Which type of auto insurance coverage will help cover the cost to get the window replaced?

Accepted Answer

Comprehensive

Answer

Bodily injury liability

Answer

Property liability

Answer

Collision

Question 7

Why would someone choose to get long term disability insurance even if they already have health insurance?

Accepted Answer

Long term disability only covers medical bills, while health insurance will help compensate for lost work with 40-60% of their income.

Answer

Long term disability insurance plans can also extend coverage to family members and pets.

Answer

Health insurance only covers regular check ups, while long term disability insurance also covers emergencies.

Answer

Health insurance only covers medical bills, while long term disability will help compensate for lost work with a percentage of their income

Question 8

You cause an accident and injure the other driver. The case goes to trial and there is a verdict to compensate the injured person with $58,000. You have a $75,000 coverage limit per person for Bodily Injury. How much will the insurance company pay?

Accepted Answer

$58,000

Answer

$0

Answer

$17,000

Answer

$75,000

Question 9

Frank has an auto policy with a coverage limit of $30,000 and a deductible of $1,000. He gets into an accident and the damages to his car total $6,200. Fortunately, he has collision coverage. How much will Frank need to pay out-of-pocket?

Accepted Answer

$1,000

Answer

$0

Answer

$6,200

Answer

$30,000

Question 10

Each of these is considered an "out-of-pocket" expense EXCEPT:

Accepted Answer

Your monthly premium

Answer

A copy of $15 to fill a prescription

Answer

A $1000 deductible if you're in an auto accident

Answer

Excess bills from a car accident once you've gone over your maximum coverage limit

Question 11

Medicaid generally provides insurance for which of the following groups of people?

Accepted Answer

Individuals in low-income households

Answer

The elderly or disabled

Answer

Anyone who wants to buy coverage from the Marketplace

Answer

Employees who have a government position

Question 12

Your employer offers an employer-sponsored health insurance plan. Which of the following statements is TRUE?

Accepted Answer

Your health insurance premiums will be paid directly from your paycheck, pre-tax

Answer

You can only see doctors who are also employees of the same company

Question 13

Which person will probably have the MOST expensive health insurance premiums?

Accepted Answer

Robin, a high earning business owner who buys a plan for their whole family on the Marketplace

Answer

Julian, who has 3 children and is eligible for Medicaid

Answer

Samantha, a widow who is eligible for Medicare

Answer

Patty, who works as an administrative assistant for an employer with a group plan

Question 14

What type of auto insurance are you required to carry in almost every state (49 out of 50)?

Accepted Answer

Insurance if you cause injury to another person

Answer

Insurance if you damage your own property

Answer

Insurance in case you get into an accident with someone who does not have insurance

Answer

Insurance if you cause injury to yourself

Question 15

An accident or illness can strike at any time and be quite expensive, so it's possible he'd need a big sum of money well before his emergency fund was large enough. This statement is a reason why Bruce, who has just graduated from college, should consider starting to pay for insurance rather than relying solely on building up an emergency fund. What is the primary risk of Bruce's plan to rely on his emergency fund?

Accepted Answer

An accident or illness can strike at any time and be quite expensive, so it's possible he'd need a big sum of money well before his emergency fund was large enough

Answer

It is mandatory to have auto, health, life, disability, and renters/home insurance, so he'll have to pay 5 penalties per year for not enrolling in these insurance types

Answer

Having insurance not only protects you financially, but also physically, so he'll be less likely to experience illness or accident if he has insurance

Answer

The sooner he starts paying for insurance, the sooner he will reach his maximum lifetime requirement and can stop paying altogether for coverage

Question 16

Your parents tell you that on your 22nd birthday, they would like for you to get your own health insurance. You are very healthy, are not taking any prescription medicines, and generally only see your doctor for your annual physical. What type of health insurance is likely to be best for you?

Accepted Answer

A high deductible plan with a low monthly premium

Answer

A low deductible plan with a high monthly premium

Answer

Your parents MUST keep you on their plan. They cannot legally remove you.

Answer

You do not need health insurance because you are healthy

Question 17

Insurance companies operate by charging individuals different prices for coverage depending on their risk levels. They then collect everyone's monthly premiums together and use the money to make payments when people file a claim (for example, someone is in an auto accident or needs to see a doctor). This concept is known as...

Accepted Answer

Risk pooling

Answer

Comprehensive coverage

Answer

Underwriting

Answer

Risk management

Question 18

Lula's got a pet dog, for whom she bought an accident and illness pet insurance policy three months ago. The dog steps on a mouse trap set out by neighbors and needs his first vet services of the year, totaling $800. Lula's deductible is $1000, her reimbursement rate is 75%, and her coverage limit is $15,000. How much does Lula pay, and how much does the insurance pay?

Accepted Answer

Lula pays $800, the insurance pays $0

Answer

Lula pays $0, the insurance pays $800

Answer

Lula pays $200, the insurance pays $600

Answer

Lula pays $600, the insurance pays $200

Question 19

In general, how do insurance companies decide how much to charge an individual for their monthly premiums?

Accepted Answer

The company assesses the individual's risk factors and assigns higher premiums to higher risk individuals

Answer

The company looks at the individual's tax filings from the previous year to assess overall wealth and ability to pay

Answer

The company charges the same premium for every individual eligible for coverage

Answer

The company increases or decreases premium rates based on the stock market

Question 20

Which of the following insurance coverage options would be the lowest priority for a typical single person, with no children, 1-2 years out of high school?

Accepted Answer

Life Insurance

Answer

Health Insurance

Answer

Auto Insurance (if they have a car)

Answer

Renter's Insurance (if they are renting an apartment)

Question 21

A standard renters insurance policy would cover each of the following EXCEPT...

Accepted Answer

A new window when a baseball breaks the original one

Answer

A small TV and some sneakers, stolen in a robbery

Answer

A lawsuit brought when a visitor hits their head on a low hanging light fixture

Answer

A week of hotel reservations when the tenant has to move out due to fire damage

Question 22

Finn moves from a rented apartment into his very first house. What should he expect regarding the cost of homeowners insurance compared to renters insurance?

Accepted Answer

His homeowners insurance will be MORE expensive than his renters insurance was

Answer

He will not need homeowners insurance, because owning a home is less risky than renting

Answer

His homeowners insurance will be LESS expensive than his renters insurance was

Answer

His homeowners insurance will be the same cost as his renters insurance was

Create a free account and access millions of resources

Similar Resources on Wayground

Popular Resources on Wayground

Discover more resources for Mathematics