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

Insured shares risk of loss with all other policy holders

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

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

protect against the financial effects of being out of work

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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
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 insurance sales person
Insured shares risk of loss with all other policy holders
Risk of loss is shared with the government
2
Generally, the higher the deductible on an insurance policy, the
more frequently the premium has to be paid
greater the premium
less frequently the premium has to be paid
lower the premium
3
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
Auto liability coverage
Insolvent motorist coverage
4
Sally took out a $50,000 life insurance policy. The $50,000 amount of coverage is called the
Death benefit or face value
Annuity value
Cash value
Premium value
5
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
receive payment from insurance company of $250 for claim
have to pay a quarterly premium of $250
6
Debbie owns a store & is concerned a customer who is injured in her store may sue, she needs
Surety bonds
Life insurance
Liability Insurance
Social insurance
7
You have a $2,000 loss.Your insurance co. pays $1,500 on the claim. The $500 difference is a
Co-insurance clause
Deductible
Hazard clause
Premium
8
The purpose of insurance is NOT to
Protect assets
Diversity an investment portfolio
Protect against potential losses
Share risk with other policy holders & the insurance company
9
Which auto insurance will repair damages to your vehicle when something collides with it?
Comprehensive
Liability
Disability
Collision
10
When a self-employed person decides to purchase disability insurance it is generally to
insure costs of injury caused to others will be reimbursed
protect against the financial effects of being out of work
eliminate the chance of going out of business
lessen the possibility of becoming injured
11
What does comprehensive insurance cover?f
All answers are correct
Theft
Damage should you hit an animal.
Damage to your car caused by an event other than a collision

W!se Financial Literacy INSURANCE Review Flashcards | StudBud