Financial Math: Why is Insurance Important?

What is the primary purpose of insurance?

• To provide legal advice

• To remain protected from financial loss

• To guarantee a profit in business

• To cover all personal expenses

What determines how much damage is covered by an insurance policy?

• The type of accident

• The insurance company's discretion

• Your policy

• The police report

Which of the following is NOT one of the four most common lines of insurance?

• Car

• Life

• Pet

• Home

What are floater policies used for?

• Covering business-related losses

• Insuring specific items for higher limits per item

• Providing unlimited coverage for all items

• Insuring rental properties

Which of the following is a type of insurance mentioned in the image?

• Travel

• Business

• Education

• Wedding

What is a policy in the context of insurance?

• A legal document outlining the rules and regulations of a company

• A contract between you and your insurance company, an enforceable promise for something of value

• A government regulation that insurance companies must follow

• A list of potential risks that an insurance company can cover

What does the Policy Term refer to?

• The amount of money you pay for your insurance policy

• The length of coverage provided on a policy

• The date when the insurance policy was signed

• The number of people covered under the insurance policy

What is the Declarations Page also known as?

• Coverage Summary

• Insurance Overview

• Dec Page or "Binder"

• Policy Outline

What are Exclusions in an insurance policy?

• Additional coverage options that you can purchase

• Discounts offered by the insurance company

• Things the policy will not cover, which will always be listed directly and explicitly

• The legal terms and conditions of the insurance policy

What is a premium in the context of insurance?

• A detailed report of your driving history

• What you pay to the insurance company each month, aka your bill

• A discount offered by the insurance company

• The insurance company's estimate of what they can offer you