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MM Chap 6 Terms
Study guide for chapter 6 Test Money Matters
| Term | Definition |
|---|---|
| Risk | The chance of injury, damage, or economic loss |
| Loss | a physical injury, damage to property, or disappearance of property or other assets |
| Probability | The likelihood of a risk resulting in a loss |
| Risk Assessment | the process of identifying risks and deciding how serious they are |
| Risk Reduction | finding ways to lower your chance of incurring a loss |
| Risk Avoidance | stopping behavior that leads to a risk |
| Risk transfer | passing risk to another party |
| Premium | the price you pay for insurance coverage |
| Risk assumption | accepting the consequences of risk |
| Self-insure | setting aside money to be used in the event of injury or loss of assets |
| Health Insurance | a plan for sharing the risk of medical costs resulting from injury or illness |
| Fee-for-Service Plan | a type of health insurance plan that allows patients to choose any doctor or other provider for medical services |
| Health Maintenance Organization (HMO) | a group plan that provides prepaid medical care for its members |
| Preferred Provider Organization (PPO) | a network of independent healthcare providers that band together to provide health care services for a set fee |
| Stop-loss-provision | an insurance clause that sets a maximum that the insured has to pay out of pocket during any calendar year |
| Disability insurance | insurance that provides income to replace a portion of normal earnings |
| Life insurance | insurance that pays money to a beneficiary upon the death of the insured person |
| Beneficiary | the person designated to receive money from a life insurance policy |
| Temporary life insurance | a policy that remains in effect for a specific period of time |
| Permanent life insurance | a policy that remains in effect for the insured’s lifetime and builds cash value |
| Homeowners Insurance | a policy that protects property owners from risk of loss to their real and personal property |
| Liability coverage | protection against injuries suffered by others while on your property or as a result of your actions |
| Home inventory | a list of items of value in your home; use for insurance purposes |
| Replacement value | the cost of replacing an item regardless of its actual cash (market) value |
| Renters insurance | a policy that protects renters from personal property and liability risks |
| Auto insurance | a policy that protects a car owner from losses as a result of accidents and other events |
| Collision coverage | a policy that protects against damage to your own vehicle if you hit another car or lose control and rollover |
| Comprehensive coverage | protection against damages to your car from causes other than collision or rolling over |
| Personal injury protection | coverage for medical, hospital, and funeral costs of the insured and passengers in the event of an accident, regardless of who is at fault. |
| Uninsured/underinsured motorist coverage | protection against damages caused by a motorist with no or insufficient insurance |
| Umbrella liability Insurance | a supplement to your basic auto and homeowners coverage that expands limits and includes additional risks |
Created by:
mrstephens
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