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FCS 340 Exam 3 | Actual Exam Questions | 100% Correct Answers | Verified 2024 Version
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Traditional financial guidelines suggest that your home should cost about __________ times your annual income - ✔✔ 20 - 30% List advantages and disadvantages of renting - ✔✔Advantages: Easy to move, financial benefits, lifestyle flexibility Disadvantages: No tax benefit, limitations on remodeling, restrictions on pets The opportunity to have another person take over rent payments and live in the rental unit is called __________________________. - ✔✔Subletting List advantages and disadvantages of buying a home. - ✔✔Advantages: Pride of ownership, financial benefits, lifestyle flexibility Disadvantages: Financial commitment, higher living expanses, limited mobility List important factors to consider when selecting a contractor to build a home. - ✔✔Contractor reputation Experience Payment schedule Timeline of building In order to purchase a home, most people need to save for a _______________________ before purchasing - ✔✔downpayment List important considerations in choosing a home to purchase - ✔✔Move-in ready Fixer upper School district
How much you can afford What should a home buyer consider when evaluating the actual house? - ✔✔Zoning laws School systems Future construction around you Property values in area What does the real estate agent do? - ✔✔Help sell or buy real estate When buying an older house, a buyer should get a ____________________ to find out about possible problems with the house. - ✔✔Inspector After submitting an offer on a house, the seller may choose to provide a________________, rejecting the submitted offer. - ✔✔counteroffer What is a contingency clause? - ✔✔Agreement is good only if certain events happen What is an appraisal? Why does the mortgage company conduct an appraisal? - ✔✔-Assessing something.
If you choose to avoid the risk of a traffic accident by not driving to work, you are using risk _______________________. - ✔✔Risk avoidance If you choose to wear your seatbelt, you are using risk __________________________. - ✔✔Risk reduction Liability is defined as: - ✔✔Legal responsibility for cost of another persons losses or injuries. What is typically covered in homeowner's insurance? - ✔✔-Building you live in and other structures on property
How can you be covered in case of a flood? - ✔✔Flood insurance How do you determine how much coverage you need for your house? - ✔✔How much it will cost to rebuild your house Megan is contacting several insurance companies to compare coverage for her home. What factors could affect her premiums? - ✔✔Location of home Type of structure Sarah was contacted by her home insurance agent to discuss ways to decrease her premium. What could she do to decrease her premium? - ✔✔-Raise deductible
What is coinsurance? - ✔✔a type of insurance in which the insured pays a share of the payment made against a claim. a type of insurance in which the insured pays a share of the payment made against a claim. - ✔✔Assigned benefits This health insurance provision sets limits on the amount of repayment for certain services is called ________________________________. - ✔✔Internal limits
. A policy that pays you back for actual expenses is called a ______________________ plan. - ✔✔Hospital indemnity policies After you have reached a certain limit that you must pay for the deductible and coinsurance, the insurance company covers 100% of any additional cost. This is called - ✔✔Out of pocket limit What are the major differences between a health maintenance organization (HMO) and a preferred provider organization (PPO)? - ✔✔HMO- Provides services for a fixed, prepaid monthly min. PPO- Group of doctors who agree to provide health care at rates approved by insurer. Karli contributes pretax dollars to an account managed by her employer for her health care expenses. If she does not spend all of her money by the end of the year, she may forfeit it. What kind of plan does she have? - ✔✔Flexible spending account . Individuals over the age of 65 who are eligible for federal government health plan coverage may also be interested in purchasing more coverage called ________________________. - ✔✔Medigap If you are concerned that your disability insurer may try to cancel your coverage if your health becomes poor, you should look for a plan that offers _____________________________. - ✔✔Premium disability benefit
A person who is named to receive the benefits from an insurance policy is a _______________________________. - ✔✔Beneficiary Why do people buy life insurance? - ✔✔-Pay off home mortgage
b. Limited installment payment. c. Life income option. d. Proceeds left with the company. - ✔✔Lump sum- Pays face amount of policy in one installment. Limited installment- Provides payments in equal installments for certain amount of years. Life income option- Payments are made as long as beneficiary lives. Proceeds left w/ the company- Left w/ insurance company at specified rate of interest. Explain the following annuities: a. Fixed annuity b. Variable annuity c. Index annuity - ✔✔-Fixed annuity- The annuitant will receive fixed amount of income over certain period.