Insurance Quiz

What is the role of an actuary in the context of insurance?

• A professional who calculates taxes

• A mathematician who assesses risk involved with insuring an individual

• A legal advisor for insurance claims

• A customer service representative in an insurance company

What does the term "deductible" refer to in an insurance policy?

• The initial amount paid to activate the policy

• The portion of repair costs the insurance policy holder is required to pay after an accident

• The total amount the policy covers annually

• The fee for processing an insurance claim

What is a "premium" in the context of an insurance policy?

• The document outlining the terms of the policy

• The amount of money you pay annually to have an insurance policy

• A bonus paid to policyholders for no claims

• The interest rate applied to unpaid insurance fees

What does "total loss" mean in terms of vehicle insurance?

• When a vehicle is stolen and not recovered

• When the cost to repair a car exceeds the fair market value of the car

• When an insurance company decides to terminate a policy

• When a policyholder defaults on premium payments

What is an "out of pocket expense" in the context of car accidents?

• The amount a driver will pay to replace a vehicle after an accident

• The cost covered entirely by insurance

• The amount of money a driver will pay to repair their car after an accident

• The legal fees associated with disputing a claim

What does APR stand for in financial terms?

• Annual Percentage Rate

• Automatic Payment Requirement

• Adjusted Principal Remaining

• Annual Payable Rent

What is a simple interest rate?

• A rate where interest is compounded annually.

• A rate where interest accrues on the interest.

• A rate where interest only accrues on the principal.

• A rate calculated daily on the total loan amount.

What does the term 'warranty' imply in the context of purchasing a car?

• The car's insurance policy.

• A guarantee that the car will meet certain requirements within a set amount of time.

• The lease agreement terms.

• The finance rate applied to the car loan.

What is the purpose of a down payment in home purchasing?

• To cover the real estate agent's fees.

• To pay for the home's utilities upfront.

• To decrease the monthly mortgage payments.

• To deduct from the home's sale price on purchase day.

What is an amortization schedule?

• A document listing the home's previous owners.

• A plan for home renovations.

• A table showing how much money will be paid in interest and towards the principal of a loan, broken down by month.

• A record of all property taxes paid over the life of the loan.