Insurance is frequently described as a method of "sharing the risk" because the

Insured shares risk of loss with all other policy holders

When a self-employed person decides to purchase disability insurance it is generally to

protect against the financial effects of being out of work

Ben's truck is crushed by a hit-and-run driver. What type of coverage will pay for damages?

Uninsured or no-fault motorist coverage

A person buys a homeowner's policy with a $250 deductible, which means the person will

pay the first $250 and that is deducted from settlement paid

The purpose of insurance is NOT to

Diversity an investment portfolio

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W!se Financial Literacy INSURANCE Review

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Review questions for the W!se Financial literacy certification related to insurance

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Questions 11

Answers

1
Generally, the higher the deductible on an insurance policy, the
lower the premium
less frequently the premium has to be paid
more frequently the premium has to be paid
greater the premium
2
Insurance is frequently described as a method of "sharing the risk" because the
Insured can share risk by spreading the cost over many years
Risk of loss is shared with the government
Risk of loss is shared with the insurance sales person
Insured shares risk of loss with all other policy holders
3
You have a $2,000 loss.Your insurance co. pays $1,500 on the claim. The $500 difference is a
Premium
Co-insurance clause
Deductible
Hazard clause
4
Debbie owns a store & is concerned a customer who is injured in her store may sue, she needs
Liability Insurance
Social insurance
Surety bonds
Life insurance
5
What does comprehensive insurance cover?f
Theft
Damage to your car caused by an event other than a collision
All answers are correct
Damage should you hit an animal.
6
Which auto insurance will repair damages to your vehicle when something collides with it?
Disability
Liability
Collision
Comprehensive
7
When a self-employed person decides to purchase disability insurance it is generally to
insure costs of injury caused to others will be reimbursed
lessen the possibility of becoming injured
protect against the financial effects of being out of work
eliminate the chance of going out of business
8
Sally took out a $50,000 life insurance policy. The $50,000 amount of coverage is called the
Premium value
Cash value
Death benefit or face value
Annuity value
9
Ben's truck is crushed by a hit-and-run driver. What type of coverage will pay for damages?
State motorist coverage
Uninsured or no-fault motorist coverage
Insolvent motorist coverage
Auto liability coverage
10
A person buys a homeowner's policy with a $250 deductible, which means the person will
not be responsible for the first $250 of the claim damages
pay the first $250 and that is deducted from settlement paid
have to pay a quarterly premium of $250
receive payment from insurance company of $250 for claim
11
The purpose of insurance is NOT to
Protect against potential losses
Diversity an investment portfolio
Protect assets
Share risk with other policy holders & the insurance company

W!se Financial Literacy INSURANCE Review Flashcards | StudBud