Assignment4_082267 - BA250 Personal Finance Assignment 4 5...

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BA250 Personal Finance Assignment 4 5 April 10 Chapter 9 Review Questions Page 312 - 314 2. The terms are defined as follows: Beneficiary – The person who receives the insurance when the insured dies. Face amount – The amount of insurance money provided at death. Insured – The person who’s life is insured by the policy. Policy holder/Policy owner- The person or entity that owns the insurance policy. 3. The main purpose of life insurance is to offset lost income when the primary “bread winner” dies. Life insurance is necessary if you do not already have a substantial amount of money in the bank. A family with debt and a small emergency fund will always need life insurance but after all the debts are paid, and a good deal of money is earned from investments, life insurance is no longer a necessity. 9. A policy rider is a provision added to an insurance policy that either adds extra benefits (at a higher premium) or limits liability under specific conditions. Common riders include disability premium waiver where the insurance stays in place even if you are disabled before 65, accidental death which increases the death benefit if you die in an accident, guaranteed insurability where you have the right to increase the insurance without further medical exams, cost of living which increases death benefits at the same rate of inflation, and living benefits where an early payout is made for terminally ill patients. . 13. Basic health insurance is the common insurance most people who are insured have and it covers a combination of hospital visits, surgical and physician expenses. Major medical insurance is designed to cover medical costs above and beyond what basic health insurance covers. People with long term serious illnesses should carry major medical insurance. 14. The terms are defined as follows: Coinsurance/Percentage participation provision- A provision that defines the percentage of each claim that the company will pay. Copayment /Deductible-The amount the insured must pay before the insurance company will pay any benefits. Lifetime cap- The maximum amount the insurer will pay out over the lifetime of the insured.
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This note was uploaded on 01/19/2011 for the course BA 250 taught by Professor None during the Spring '10 term at Grantham.

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Assignment4_082267 - BA250 Personal Finance Assignment 4 5...

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