Understanding Insurance and Loans

Front

What is life insurance?

Back

A contract that provides financial protection to beneficiaries upon the death of the insured.

Front

Why might someone choose life insurance?

Back

To provide financial security for dependents.

Front

What is a deductible in an insurance policy?

Back

The amount the policyholder must pay out-of-pocket before insurance coverage begins.

Front

What is typically NOT covered by health insurance?

Back

Cosmetic surgery.

Front

What is the principal in a loan?

Back

The amount of money borrowed.

Front

What can happen if a loan is not repaid?

Back

Legal action and damage to credit score.

Front

What is the purpose of insurance?

Back

To provide financial protection against potential future losses.

Front

What is the difference between premium and deductible?

Back

Premium is the amount paid for insurance coverage, while deductible is the amount paid out-of-pocket before coverage kicks in.

Front

What is interest in the context of loans?

Back

The cost of borrowing money, usually expressed as a percentage of the principal.

Front

What is the role of beneficiaries in life insurance?

Back

Individuals designated to receive the death benefit from a life insurance policy.