58 terms

Family Finance-Final Exam 3

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Terms in this set (...)

When you die, the insurance company keeps any cash value accumulated on life insurance policy
true
nearly one-third of U.S. households do not have any life insurance at all
true
Selecting a longer elimination period for your disability insurance will increase your premium costs
false
The majority (more than 50%) of people over the age of 65 will require long term care at some point in their lives
true
Occupational ("own occ") insurance is primarily designed to pay benefits when you have been injured on your job
false
When purchasing life insurance, policies that accumulate a cash value are often a good choice
false
It is recommended that you obtain a homeowner's insurance policy with extended replacement cost coverage
false
The idea of driving your car for 250,000 miles is an unrealistic goal because most vehicles are not designed to go that far
false
You could not find any information about the history of a particular car on Autotrader.com
false
It is not recommended that you purchase items from public auctions because you usually do not know how an item has been maintained
false
the first key to opening the door to huge bargains is you must know where to find great deals
false
Short-term disability is covered by your emergency funds; therefore you should not only buy long-term disability
true
The amount of your student loans which are forgiven under the Public Service Loan Forgiveness Program is NOT subject to federal income taxes
true
Medical bills and illnesses are the leading cause of bankruptcy in the US
true
Generally, you qualify for the Public Service Loan Forgiveness Program if you work full-time or part-time for the government or a 501 (c) (3) nonprofit organization
false
One way to increase your FICO credit score is to increase the amount you maintain in your emergency fund
false
To qualify for the Public Service Loan Forgiveness Program, you must make 120 consecutive monthly payments on your student loans while employed in a public service job
false
You student loans must be consolidated or re-consolidated into Federal Direct Loans if you want them to be eligible for the Public Service Loan Forgiveness Program
true
Pawn shops are not a safe place to find bargains because of the risk that you may purchase something that has been stolen
false
It is recommended that you carry a cancer insurance policy to supplement the coverage of your health insurance policy because the costs of treatment are so high
false
your personal budget should always include a provision for the purchase of life insurance
false
using the phrase "that's not good enough" would be an effective strategy for letting a salesman know that you have walk away power
true
upon your death, the life insurance company will pay you the face value of the policy plus the cash value that has accumulated over the life of the policy
false
the primary purpose for buying insurance is to transfer risk
true
it is recommended that you buy only low-cost term life insurance
true
an auto insurance policy with liability coverage is designed to repair your vehicle in the event you have a wreck
false
inaccurate information is the only information that may be legally removed from a credit report
true
It is desirable to have a FICO credit score because it is a good indication of your financial success
false
You are entitled to obtain a free credit report four times a year, once in each quarter of the calendar year
false
It is important to purchase both short-term disability and long-term disability insurance
false
An important strategy for negotiating a great deal is to know when to quit talking
true
it is wise to maintain life insurance for the duration of ones life
false
cash value life insurance is a good way to invest because it has built in savings plan
false
A bargain ain't a bargain unless it is something you really need
true
Which one of the following is not a reason buyers fail to obtain big, big, bargains
they are afraid to ask for a deal, they fail to use walk away power, they are afraid to say "that's not good enough"
Identity theft is the fastest growing white collar crime in the U.S. what percentage of identities are stolen by people you know
80%
The type of insurance that provides an income in the event you are unable to perform the job that you were educated or trained to do is called
occupational disability
The time between a disabling event and the beginning of payments is referred to as
the elimination period
According to our class discussion, which resource would give me information about dealer/manufacturer incentives or rebates that may be available for a car i wanted to buy?
Edmunds
When considering student loan repayment options, what advantages does the Income Based Repayment Plan have over the Income Contingent Repayment Plan
calculations are based on 150% of the poverty line income for your family size, the adjusted gross income of your spouse may be excluded
Which of the following was not one of the places recommended for finding big, big bargains
individuals, repo lot, flea markets, online auctions
You should purchase sufficient disability insurance to pay ___ % of your current income
65%
Which repayment plan will usually result in the lowest monthly payment for a student loan
income-based repayment
Which of the following is not one of the three keys to opening the door to huge bargains
you must research everything
Other than chapter 7 bankruptcy, account information is removed from your credit report ___ years after the last activity on the account
7 years
Which resource is/are primarily designed to give me information regarding the history of a specific vehicle I wanted to buy
carfax, autocheck
the first key to opening the door to huge bargains is to
learn to negotiate everything
the point at which an insurance company begins to pay 100% of an individual's medical expenses is referred to as
stop loss point
Public service employment is not likely to include which of the following jobs
a military service, working for a child or family agency, working as a nurse at the county hospital, working for Head Start
Which resource would give me the best information about the availability of a vehicle i wanted to buy
Autotrader
According to a Public Interest Research Group survey, ___ % of credit reports contained errors serious enough to result in the denial of credit
25%
Which resource would provide me with the true market value (TMV) of a used car I wanted to buy
Edmunds
A life insurance policy for a specific period of time is referred to as
term insurance
It is recommended that you purchase life insurance that amount of which is equal to ___ times your annual income
10 times
The maximum repayment period for student loans under the Income Contingent Repayment Plan and the Income Based Repayment Plan
25 years
Which of the following did I indicate was the most important strategy for getting the maximum miles out of your car? In other words, the most important strategy for making your car last a long time
change the vehicle's fluids regularly
Identify and explain three reasons cash is such a powerful strategy for obtaining a great deal
When striving to get a good deal a powerful strategy would be to use the power of cash. Firstly, cash is emotional. It allows the buyer to see how much cash they have and to either keep them from buying something that is too expensive or pulling the trigger. Secondly, cash is visual. The buyer can see "the fruits of their labor." This will help them keep track of their spending. Also, the seller can see that the person has cash and might influence their negotiating. Finally, cash has immediacy. It is right there unlike the credit card. The person is able to tell how much they have spent and how much they have left immediately. Cash has power when it comes to the bargaining world.
In your own words, describe/explain the four-step process
The first thing that should be done when looking for a quality used car is understanding the type of car that you would like to purchase. This includes being informed of the vehicles reliability, safety, gas milage, handling, and other features. The key point is educating yourself on the characteristics of the vehicle you are looking to purchase-doing your homework. The next step is to determine your target purchase price and discover the used car values for the vehicle of your choice. The next step is to appraise the type of car that you are looking for. In the appraisal should include the features that you want to be seen. Ultimately, the goal is to obtain the True Market Value Pricing Report (TMV) for the vehicle. After doing so, your target price range may change. Next is to determine where to find the car. Checking availability and where the car you would like to purchase is located. Finally, after discovering your vehicle it is important to look at the history of the vehicle you want to buy. This step is one of the most important because you can get a car that appears to be in good shape with good pricing but it's history tells a completely different story.