ReviewJeopardy

Risk Management & Insurance Basics

Automobile Insurance Health Insurance

Life Insurance

Property & Liability

Insurance

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3PossibleAnswers

The three elements of risk management.

What areRisk Reduction,

Risk Transferand

Risk Retention?

TRUE OR FALSE: you will be able to transfer all of your risk for a peril

to an insurance company.

What isFALSE?

If you have an insurance policy for $25000 and you suffer $8000 in losses then the insurance company will pay

you this amount.

What is$8,000?

3PossibleAnswers

The three main principles of risk transfer.

What isPooling to utilize the Law of Large

Numbers to determine frequency and severity of losses,

The transferee must be willing to assume the risk,

andNot all risk can be transferred?

HIGHER or LOWER: If the frequency risk of loss is higher

then your premium will be this.

What isHIGHER?

HIGHER or LOWER: If the severity risk of loss is higher then your

premium will be this.

What isHIGHER?

HIGHER or LOWER: If the retained risk by the insured is

higher then your premium will be this.

What isLOWER?

HIGHER or LOWER: If the transferred risk is higher then

your premium will be this.

What isHIGHER?

This type of automobile insurance is required in all states

(other than no-fault states).

What isAutomobile Liability?

This portion of automobile insurance will pay for damages to other people and their property caused by you in an accident that

is your fault.What is

Automobile Liability?

This portion of automobile insurance will pay for damages to

your car caused by you in an accident that is your fault.

What isCollision?

This portion of automobile insurance will pay for damages to

your car due to vandalism.

What isOther Than Collision

(Comprehensive)?

3PossibleAnswers

The 3 normal expenses covered by routine medical expense

insurance.What are

Visits to the doctor,Treatment of basic illnesses,

andPrescription drugs?

A co-pay is normally associated with this type of insurance.

What isHealth Insurance?

2PossibleAnswers

These two terms both refer to a specific dollar amount you pay every time you make a claim on

your insurance.What are

Deductibleand

Co-pay?

You have a $12,000 health insurance claim. On your policy, you have a $2,000 deductible

and a 20% co-insurance requirement. This is how much

you will pay for the surgery.What is$4,000?

HMO or PPO: this type health insurance company requires you to see a primary care physician in order to get

a referral to see a specialist.

What is anHMO?

HMO or PPO: this type health insurance company requires you to pay a deductible

and/or co-insurance requirement for major medical treatments.

What is aPPO?

This type of insurance replaces lost income if you become disabled and

unable to work.

What isdisability insurance?

This term refers to the person who receives the payout from your life

insurance policy.

What is abeneficiary?

4PossibleAnswers

The normal intent for the use of life insurance.

What arePay funeral expenses,

Pay off debt,Replace lost income,

andPay for college?

The amount paid out by the insurance company if a person has a term life insurance policy

and dies after the end of the policy’s term.

What is$0?

The amount paid out by the insurance company if a person

has a $250,000 limited-pay whole life insurance policy and dies.

What is$250,000?

TERM LIFE or WHOLE LIFE: this type of life insurance normally

has a lower premium.

What isTERM LIFE?

The types of hazards covered by an open-perils property insurance

policy.

What isAll hazards except those specifically

excluded by the policy?

TRUE or FALSE: renters need not get property insurance because

their personal property is insured by their landlord.

What isFALSE?

ACTUAL CASH VALUE or REPLACEMENT COST: The type of property insurance that will pay you the amount needed to buy a

new version of property should it be lost or stolen or damaged.

What isREPLACEMENT COST?

This type of liability insurance provides additional coverage on any of your

existing policies (auto and property).

What is anUmbrella policy?