Test+Review

Vocabulary: term insurance, whole life insurance, beneficiary, needs assessment method, convertibility, personal property floater, right of subrogation, rating territory, deductible, claims adjustor, pre-existing condition, health maintenance organization, medicare, medicaid, monthly premium
 * Test Review for Unit 4: Chapters 8, 9, 10

Short Answer: Explain the differences between whole life and term insurance Explain the difference between income and needs based assessment method to determine life insurance need What are the common perils not covered under basic home owners insurance Explain the difference between medicare and medicaid What are issues that effect the risk with certain rating territories in terms of automobile insurane

Problems: 1. Construct a debt snowball for an individual to determine how many months it will take to be debt free. 2. Perform a life insurance needs assessment for a potential widow taking into account different income needs at different times of her life.

Essay: ( a few paragraphs for both) 1. If you worked as a financial planner and a customer wanted you to help determine their life insurance and home insurance needs before they went shopping for policies what four pieces of advice would you give them? What are the common mistakes you would urge them to avoid as they begin shopping for insurance? 2. As an elected official you are charged with heading a committee for healthcare reform in the United States. Your main goal is to assure affordability of health coverage and that the needs of all citizens are covered so everyone has health care available to them. Construct a five point plan that you would argue for. Give the reason for each of your points in your plan.**


 * Test Review for Unit 3: Chapters 6 and 7**

Vocabulary: Line of credit, wage earner bankruptcy, straight bankruptcy, home equity line of credit, minimum monthly payment, collateral, Stafford loan, simple interest, APR, Predatory Lending,

Debit vs. Credit Cards Simple vs. Compounding Interest Protecting yourself from identity theft How to repair poor credit
 * Short Answers:

**Problems: computing monthly payments on a note with simple interest computing APR computing monthly payments on a note with compounding interest

Essays: (choose 2 of 3) 1. As you enter college, and then the workforce, credit will be made available to you. Develop a plan and simple rules for how you will use credit cards wisely to help build your credit score? Which rules would you impose on yourself and why? 2. Credit scores have a large impact on ones lifestyle and can often weigh in on employment decisions. Explain how credit bureaus work. What is a good score, a great score, a poor score? What is your plan for building your own credit score? 3. It is time to take out your first consumer loan. You’ve recently graduated college and moved into an unfurnished apartment. You plan to take out a loan for $5,000 to help furnish the apartment. When you meet with the lending officer what are the four questions you would demand answers to before signing a loan document? Why would you ask these questions?

Below is the information for a review for Test Unit 2 which will cover chapters 4 and 5.

Vocabulary Interest rate, overdraft, certificate of deposit, EE series savings bond, cashier’s check, adjustable rate mortgage, closing costs, private mortgage insurance, residual value, cooperative apartment

Short Answers

Understanding various tools for savings pros and cons of auto leasing and buying advice for people buying cars at dealerships ARM mortgages - when would you recommend them.

Essays 1. I 1. Imagine you’ve been elected to public office and are part of a task force for fairness in auto purchasing. What type of laws or policies would you enact to help protect consumers? Why do you feel these measures would be successful?

2. Banks and Credit Unions often offer many of the same services. Describe the structure of each. What are the pros and cons of using a bank? What are the pros and cons of using a credit union?

3. The costs associated with home ownership often take up the largest percentage of a family's income. That being said the equity in one's home is often one of their largest assets. Experts differ on what percentage of one's income should be spent on housing. Come up with a list of rules / guidelines that would be helpful for a young family looking to purchase their first home. What is the rationale for each of your guidelines? Apply your rules / guidelines with a fictitious family showing actual numbers.

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