FiCEP Insurance Planning 2

Question 1

What is the purpose of an insurance deductible and how does it affect premiums?

Accepted Answer

A deductible is the amount the insured pays before coverage begins; higher deductibles lower premiums

Answer

Deductibles have no impact on premiums

Answer

A deductible is paid by the insurance company

Answer

Deductibles only apply to auto insurance

Question 2

A client has employer life insurance equal to one year's salary. Is this sufficient?

Accepted Answer

Usually not; most experts recommend 10-12 times annual income

Answer

Yes, employer coverage is always adequate

Answer

One year's salary is more than enough

Answer

Life insurance is unnecessary with an employer

Question 3

What is an umbrella insurance policy and who should consider it?

Accepted Answer

Extra liability coverage extending beyond home and auto policy limits, recommended for those with significant assets

Answer

Insurance covering rain damage

Answer

A type of health insurance

Answer

Insurance for businesses only

Question 4

What is the difference between copay, coinsurance, and out-of-pocket maximum?

Accepted Answer

Copay is a fixed amount per visit; coinsurance is a percentage after deductible; out-of-pocket maximum caps total patient spending

Answer

They all mean the same thing

Answer

These only apply to dental insurance

Answer

Copay is paid by the insurer

Question 5

Why is long-term care insurance important and when should clients consider it?

Accepted Answer

It covers nursing home and assisted living costs not covered by Medicare; consider it in your 50s

Answer

Only needed after age 80

Answer

Medicare covers all long-term care

Answer

It is too expensive to be practical

Question 6

What should a counselor consider when evaluating a client's auto insurance?

Accepted Answer

Liability limits, deductibles, uninsured motorist coverage, and whether vehicle value justifies comprehensive/collision

Answer

Only the monthly premium

Answer

Auto insurance is standardized

Answer

Only state minimum is needed