6-2 Insurance - Quiz Lesson 1

The amount paid by a policyholder to an insurance company to obtain or maintain an insurance policy.

• Deductible

• Premium

• Insurance Policy

• Liability

This is a dollar figure, usually a flat dollar amount (e.g., $200 or $500), that an insured person must pay out-of-pocket before an insurance policy reimburses him or her for the remainder of a loss.

• Liability

• Premium

• Deductible

• Quote

The purpose of insurance is to ...

• build wealth

• avoid risk

• manage assets

• transfer risk

Probability as it relates to insurance

• means the chance of something happening

• is defined as the risks that are covered during a time period

• is sharing risk during the year

• is the annual premium

One of your parents’ friends says he’s had automobile insurance for 20 years and

never been in an accident, so he has never collected on his insurance.

He believes he is entitled to get all of his premiums returned. Do you agree?

• YES

• NO

If you get into an accident or if there is a disaster, your insurance will always pay for all the damage.

• TRUE

• FALSE

Monthly insurance payments are called deductibles.

• TRUE

• FALSE

If your house or car is damaged, you must file a claim with your insurance company in order to be paid.

• TRUE

• FALSE

Raising your deductible may be a good option when it comes to lowering your premium, but

it is important to do a break-even analysis before making that decision.

• TRUE

• FALSE

Which of the following would not be a huge financial risk (and, therefore would

not require insurance) if you had an emergency fund of $1000 or more?

• A Car Accident

• A Broken Cell Phone

• A Medical Emergency

• Stolen Identity