Credit, Debt, and Insurance Financial Literacy Questions

Using the simple interest formula I=prt , calculate the interest earned on $150 after one year at a 6% return rate.

• $90.00
• $0.09
• $9.00
• $4.00

When one receives a product or service now, but pays for it later, it is known as what?

• Credit
• Debit
• Deduction
• Interest

All the following are examples of installment loans EXCEPT:

• Credit card
• Car loan
• Mortgage
• Student loan

Which of the following purchasing cards removes funds from one’s checking account almost instantly after one makes a purchase?

• Credit card
• Debit card
• Payroll card
• Withdrawal card

All of the following are advantages of bundling insurance EXCEPT what?

• Convenience
• Increases insurance options
• Less complicated
• Potential saving of money

Which of the following types of insurance provides income to people who depend on a wage earner after the wage earner dies?

• Automobile insurance
• Disability insurance
• Health insurance
• Life insurance

Which of the following types of insurance assists in covering medical expenses associated with short-term illness and accidents?

• Disability insurance
• Health insurance
• Life insurance
• Retirement insurance

Which of the following types of insurance helps pay for stays in a nursing home?

• Disability insurance
• Life insurance
• Long-term care insurance
• Retirement insurance

Which of the following is the term for a person who relies on someone else financially?

• Beneficiary
• Dependent
• Insurer
• Policyholder

The purpose of an umbrella insurance policy is best summarized as what?

• Cover costs associated with heavy rain
• Groups all insurance policies into one discounted price
• Protect the holder against liability costs beyond what is covered by other insurance
• Uses one insurance policy to cover each member of a family