Check Your Insurance Knowledge

Question 1

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Which is not an eligible expense using funds from a Health Savings Account?

(A) The purchase of prescription medication.

(B) Health club memberships.

(C) Physical, occupational, or speech therapy expenses.

(D) Mental health counseling expenses.

Health Savings accounts can be used to pay for a wide variety of health related expenses, but are not without restrictions. Items like health club memberships, over-the-counter medications, weight loss programs, and cosmetic surgeries are not eligible expenses. Most other basic medical and dental services are covered, as are deductibles paid under your insurance coverage.

Question 2

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When do you become eligible for COBRA health insurance coverage?

(A) If your work hours are cut and you become ineligble for employer-provided coverage.

(B) If you are terminated from a job where you had health insurance coverage.

(C) If you are a dependent of a COBRA eligible employee who lost coverage due to the death of the covered employee.

(D) All of the above.

COBRA requires continuation coverage to be offered to covered employees, their spouses, former spouses, and dependent children when group health coverage would otherwise be lost due to certain specific events. COBRA continuation coverage is often more expensive than the amount that active employees are required to pay for group health coverage, since the employer usually pays part of the cost of employees' coverage and all of that cost can be charged to individuals receiving continuation coverage.

Question 3

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What does travel insurance cover?

(A) Medical expenses incurred while traveling outside of the U.S.

(B) Medical coverage if you deliver a child while in-flight.

(C) Additional baggage fees if you buy too much stuff on vacation.

(D) None of the above.

Travel insurance will protect the traveler from financial losses that could only occur during travel. Choosing a robust travel insurance plan can lead to the coverage of medical expenses, medical evacuation costs, expensive non-refundable tickets, or lost luggage. Travel insurance typically excludes things considered pre-existing conditions, including pregnancy and childbirth or “reasonably foreseeable” problems resulting in delayed or canceled flights from protection.

Question 4

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What is homeowner's insurance?

(A) Required by the bank or mortgage company for homeowners that pay less than 20% of the cost of the property.

(B) A form of property insurance that provides coverage for repairs or replacements of home systems and appliances.

(C) A form of property insurance that covers loss and damages to an individual's residence, along with furnishings and assets inside.

(D) A form of insurance that is issued to you by your neighborhood that protects your residence from losses and damages.

Homeowners insurance policies are a form of property insurance that covers your losses and damages to an individual's residence, along with the furnishings and assets inside. There are three basic coverage levels: actual cash value, replacement cost, and extended replacement cost or value. Homeowners insurance is usually required by mortgage companies with coverage for the full or fair value of a property.

Question 5

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What is life insurance?

(A) A contract between you and your insurance company that will pay a sum of money to your beneficiaries at the time of death in exchange for premium payments.

(B) Form of health insurance that takes care of your medical expenses after the time of death.

(C) A contract issued by an insurance company that covers expenses that occurred due to the cause of your death.

(D) A form of health insurance that allows your beneficiaries to handle your financial assets at the time of death.

Life insurance is a contract between you and your insurance company that will pay a sum of money to your beneficiaries at the time of death in exchange for premium payments. It would be a priority to contact the life insurance company immediately following the insured's death so you can start the claims and payout process. Charges can occur in lump sums, installments, annuities, and through retained asset accounts.

Question 6

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Which of the following should you consider when determining your life insurance needs?

(A) The total amount of debt that will have to be repaid if you die.

(B) The amount of future income that will need to be replaced if you're no longer around to earn it.

(C) The future cost of your child's continuing education.

(D) All of the above.

If you have family that are dependent on you financially, you will want to avoid burdening them with repayment of your debts. You will also want to consider how they will move forward without you, both in terms of future income and substantial expenses, such as the cost of a college education.

Question 7

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Incorrect. You answered "". But the correct answer is "". Please make sure and read the information at the bottom to better understand the answer.

What are the two types of life insurance?

(A) Medical life and personal injury.

(B) Term life and whole life.

(C) Medical life and assets earned in life.

(D) Permanent life and personal life.

Term and whole life insurance are the two types of life insurance policies. Term life insurance will provide coverage for a specific period, ranging from 5 years or go on as long as 30 years. Term life insurance has many benefits worth considering. First, your premiums will never increase during your term, which means you can engage in long-term planning for the years where you have various responsibilities. Second, term life policies are cheaper than whole life policies. The main drawback is that the policy only has value when you pay for it, so once the term ends, the policy has no value. Whole life insurance is also known as permanent life insurance, and it has both investment and insurance components. The premium payment rates are locked in once you purchase the policy, so you don't have to worry about any increases. Whole life policies allow you to build cash value over the years.

Question 8

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What does auto insurance protect?

(A) Your vehicle, the people inside your car, people on the road, and property around.

(B) Protects your car from damages.

(C) Protects you if you get in a car accident.

(D) Allows you to be reimbursed for your vehicle if anything were to happen to it.

Auto insurance does not just protect your car; it protects the people inside your vehicle, the people on the road, and the property surrounding it. Auto insurance policies offer various features, which can be crucial to different drivers for different reasons. Some of the most common features people want from their policies include new car replacement, vanishing deductibles, and accident forgiveness. When looking for the correct auto insurance, it is best to shop around.

Question 9

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Incorrect. You answered "". But the correct answer is "". Please make sure and read the information at the bottom to better understand the answer.

How do you add a teen driver to your auto insurance most cost effectively?

(A) Purchase a safe car for your teen for lower premiums.

(B) Add your teen to an existing policy instead of purchasing a separate one.

(C) See if there are any bundles or discounts with your current plans.

(D) All of the above.

The most cost-effective way to add a teen driver to your auto insurance is by adding them to your existing policy rather than purchasing a new one. If you are buying a new insurance policy, you may face a rate increase on your premium. You can also have your teen driver use a safe vehicle, allowing your premiums to be cheaper. Lastly, another option is to look into bundling your homeowners and auto insurance policy if it's under the same insurance company, which could lead to discounts for having multiple policies with the same company.

Question 10

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Incorrect. You answered "". But the correct answer is "". Please make sure and read the information at the bottom to better understand the answer.

How many types of auto insurance are there?

(A) 3.

(B) 4.

(C) 5.

(D) 6.

Six main types of car insurance are available when you purchase a policy, which is why it is essential to shop around so you can find the right features for yourself. The main types include bodily injury liability, medical payments or personal injury protection, property damage liability, collision, comprehensive, and uninsured and underinsured motorist coverage.

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