Insurance — Unit test Answers

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21
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The type of credit people are most likely to use for small purchases during their lifetime is

A
a credit card.
B
a personal loan.
C
an auto loan.
D
a mortgage.
22
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Which consequences can victims of identity theft face? Check all that apply.

A
difficulty getting a loan or credit card
B
an increase in debt
C
the loss of a job
D
difficulty keeping assets
E
a loss of money
F
difficulty landing a new job
23

Maria's family has a health insurance plan. Her mother has $350 deducted from her paychecks each month.When Maria visited the doctor, her mother paid a $25 fee. The insurance company covered the rest of the cost of the visit.When Maria's mother went to the hospital, her family was responsible for paying the first $1,000 of the bill. After this payment, the insurance company covered the rest of the costs.

A
payout
B
deductible
C
co-payment
D
premium
24

What best determines whether a borrower’s interest rate on an adjustable rate loan goes up or down?

A
a fixed interest rate
B
a bank's finances
C
a market's condition
D
a person's finances
25

Why does insurance often provide "peace of mind"?

A
People know their insurance coverage will help prevent accidents and damage.
B
People trust that they will make a profit if they pay insurance premiums.
C
People are not concerned about their health if they can pay for doctor's visits.
D
People are less worried when they know they have protection from risk.
26

Which person is a victim of identity theft?

A
Suzie, whose e-mail was stolen and used to apply for a credit card from a major retailer
B
Michael, whose credit score was stolen and used to make a down payment on a home
C
Pam, whose smartphone was stolen and used to make a mortgage payment
D
Thomas, whose credit card information was stolen and maxed out at a jewelry store
27

[BLANK]

A
monitor
B
flag
C
freeze
D
cancel
28

The safest way for someone to make an online purchase is to

A
ask friends what websites are secure.
B
check with the government first.
C
buy from a reputable website.
D
visit a locally run website.
29

In determining whether to issue a loan, banks are not allowed to ask about an applicant’s

A
employment history.
B
date of birth.
C
country of origin.
D
income tax returns.
30

Which describes the difference between simple and compound interest?

A
Simple interest is paid on small, short-term loans, while compound interest is paid on large, long-term loans.
B
Simple interest is paid on the principal, while compound interest is paid on the principal and interest accrued.
C
Simple interest is paid on large, long-term loans, while compound interest is paid on small, short-term loans.
D
Simple interest is paid on the principal and interest accrued, while compound interest is paid only on the principal.

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