Insurance Study Guide ● What is an insurance premium? An insurance premium is the amount of money an individual or business pays for an insurance policy. ● What is co-insurance? The percentage of costs of a covered health care service you pay (20%, for example) after you've paid your deductible. ● What are “out of pocket” expenses? An out-of-pocket expense is the direct payment of money that may or may not be later reimbursed from a third-party source. ● What impacts how much you pay for auto insurance? Your gender, age, marital status, geographical location, and credit score all affect your insurance rates in different ways. ● How do insurance companies make money? When an insurance customer pays their monthly premium, the insurance company takes the money and invests in the financial markets, to increase their revenues. ● If you do not have any claims, do you get your insurance premium back at the end of the year? Most term life insurance policies do not have a return of premium component. If you have a traditional term life insurance policy, you won't be refunded your premiums when the coverage period has ended. ● If you have $1,000 deductible and your claim is $800, how much will the insurance company pay? A higher deductible means a reduced cost in your insurance premium. ● Do insurance premiums go up or down if your deductible goes down? The amount of the deductibles is inversely proportional to the premium, so increasing your deductibles will lower your rates, and vice versa. ● If your window is busted out of your car window that is parked on the street, what insurance option covers this damage? When one of the windows of your car is shattered, cracked or chipped as a result of something other than a collision, comprehensive coverage may pay for the window to be repaired or replaced. ● If it is important to you which doctor you attend, then would it be important to check the “in network” doctors list prior to choosing an insurance? Most doctors truly put patients' care first, before profit. But, there are a few who inappropriately use their medical degrees for profit. ● Are car insurance premiums set by law and unchangeable? Many factors go into determining an auto insurance premium: age, driving record, previous coverage, the type of vehicle you are looking to insure - even geography. ● If you have a coverage limit of $30,000, a deductible of $1,000 and a claim of $23,000. How much will you pay out of pocket? A health insurance deductible is a specified amount or capped limit you must pay first before your insurance will begin paying your medical costs. ● What is included in a typical insurance policy? While different states mandate different types of insurance and there are several additional options (such as gap insurance) available, most basic auto policies consist of: bodily injury liability, personal injury protection, property damage liability, collision, comprehensive and uninsured/underinsured motorist. ● What are the advantages to enrolling in a company sponsored health insurance policy? Here are key employee benefits of employer-sponsored health coverage – and why you should be offering it: It can reduce absenteeism. A healthy employee is present and more productive ● What factors influence the cost of health insurance? Five factors can affect a plan's monthly premium: location, age, tobacco use, plan category, and whether the plan covers dependents. ● What type of automobile insurance is required to be carried in most states? Most if not all states require drivers to carry mandatory liability insurance coverage to ensure that their drivers can cover the cost of damage to other people or property in the event of an accident. ● Why would it be a bad idea for a college graduate to decide not to take out an insurance policy and just plan to build up an emergency savings account for all potential insurance needs? This is usually listed as the primary reason you need an emergency fund—and for good reason. You have to have a stash of cash to pay for things if you're no longer receiving a regular paycheck. ● What type of health insurance policy would match a 22 year old healthy individual with no medications and limited doctor visits? ● What is risk pooling? A risk pool is one of the forms of risk management mostly practiced by insurance companies. ● If your car is hit over night and you are never able to find out who did it, what type of automobile coverage will cover your claim? When someone borrows your car and has an accident, any claims for damages by other parties are made against your insurance policy. ● If you chose to get a cheap, high deductible insurance and plan to change to a better insurance if you have to go to the hospital by calling on the way to the hospital to get the new insurance, would this plan work? Why or why not? ● What is life insurance? Life insurance is a contract between an insurance policy holder and an insurer or assurer, where the insurer promises to pay a designated beneficiary a sum of money in exchange for a premium, upon the death of an insured person. ● How does an insurance company decide who to insure and how much to charge? Many factors go into determining an auto insurance premium: age, driving record, previous coverage, the type of vehicle you are looking to insure - even geography. ● Which insurance would a single person only 1 to 2 years out of college be least likely to purchase? The uninsured rate among non-elderly adults (those aged 18 to 64) increased slightly from 11.9 percent in 2016 to 12.1 percent in 2017. ● If you have a copay of $25 for prescriptions and a prescription covered by your insurance plan costs $75, how much would you pay for it? A copay is the amount you pay when you get a prescription filled. This could mean a fixed copay (for example, $10 for a generic drug or $80 for a brand-name drug) or a percentage (for example, 20 percent of the total cost of a medication).
