Personal Finance: Insurance

A financial product purchased by many people facing a similar risk to protect against the risk of larger losses

• Premium

• Policy

• Insurance

• Risk

• Deductible

The money paid to an insurance company to purchase a policy

• Premium

• Policy

• Insurance

• Risk

• Deductible

The chance of loss from an event that cannot be entirely

controlled

• Premium

• Policy

• Insurance

• Risk

• Deductible

The out‐of‐pocket money paid by the policyholder before an

insurance company will cover the remaining costs attributed to the loss

• Premium

• Policy

• Insurance

• Risk

• Deductible

A contract between the insurance company and the insured

that states the exact terms of the policy including what risks are covered and how much will be paid for any losses

• Premium

• Policy

• Insurance

• Risk

• Deductible

Which is the correct type of insurance that would be used: David’s mother is killed in an automobile accident. What type of insurance would provide his family financial support to cover the paid and unpaid work his mother performed?

• Property and liability

• Health

• Life

• Disability

• Workers’ compensation

Which is the correct type of insurance that would be used: Sally is not feeling well so her mother takes her to the doctor. The doctor tells her she has strep throat, gives her medication, and sends her home to recover. What type of insurance would be used in this case?

• Property and liability

• Health

• Life

• Disability

• Workers’ compensation

Which is the correct type of insurance that would be used: Joey’s father is in a car accident and cannot work. What type of insurance replaces his father’s earnings?

• Property and liability

• Health

• Life

• Disability

• Workers’ compensation

Liability insurance covers accidental harm that may be caused to other people or property.

• True

• False

A beneficiary is the individual who takes out the life insurance policy.

• True

• False