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W!se Practice Questions - Insurance Flashcards | StudBud
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W!se Practice Questions - Insurance
W!se Practice Questions - Insurance
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Practice questions for the W!se Financial Literacy Test organized by Test Blueprint.
Flashcards
13 cards
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Questions
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1
A person files an insurance claim for $2,000 in damages and is required to pay $500 of the cost. The $500 is their ____.
Face value.
Dividend.
Premium.
Deductible.
2
If a driver hits a deer and has damage to their vehicle, what type of car insurance coverage pays for the repair?
Collision coverage.
Comprehensive coverage.
Liability coverage.
Acts of nature coverage.
3
A person has a ten-year term life insurance policy. The policy will pay
A cash value of $250,000 at the end of ten years.
The death benefit in the insured dies after the ten-year term.
The death benefit if the insured dies within the ten years.
A cash value equal to the premiums paid over the ten years
4
How does renters' insurance differ from homeowners' insurance?
Renters covers personal belongings & homeowners' insurance covers structure
Renters insurance is typically more expensive than homeowners' insurance.
Renters insurance is required by law and homeowners' insurance is optional.
Homeowners is only for properties occupied by the owner of the property
5
Which of the following statements best explains an HMO?
An organization that provides home maintenance services.
An organization that offers home mortgage options.
A type of retirement savings account.
Health insurance plan that requires a referral for specialists.
6
What is a potential benefit of whole life insurance?
It offers the opportunity to build cash value over time.
It provides coverage for a specific number of years.
It is the cheapest policy available for individuals over the age of 70.
It requires no premium payments.
7
Why might a person decide to purchase disability insurance?
To protect against the loss of income due to illness or injury.
To cover the cost of vacations if they are on sick leave.
To pay for the cost of unexpected medical expenses.
To finance renovations for an older home.
8
Why might a person opt to purchase a term life insurance policy?
To accumulate cash value over time.
To guarantee coverage for the entire lifetime of the insured.
To provide coverage for a specific period at a lower cost.
To provide coverage for medical expenses.
9
The primary purpose of insurance is to ________________________.
Provide financial protection against unforeseen events.
Make a profit for insurance companies.
Increase government revenue.
Promote risky behavior.
10
To cost of insurance is called the _________________.
Deductible.
Premium.
Face value.
Dividend.
11
What is the relationship between the insurance premium and deductible?
As the premium decreases, the deductible decreases.
As the premium decreases, the deductible increases.
They are unrelated factors.
As the premium increases, the deductible increases.
12
Replacement coverage is insurance that
Covers the cost of repairing damaged property.
Covers the cost of replacing damaged or stolen property with same value.
Reimburses the policyholder for the full purchase price of an item.
Provides coverage only for specific types of natural disasters.
13
Insurance is frequently described as a method of sharing the risk because the insured person shares the risk with the
Insurance company.
Other policyholders.
Federal government.
Family members.
