Insurance

Front

Which type of insurance is the lowest priority for a single, 24-year-old?

Back

Life insurance

Answer explanation

Life insurance is typically the lowest priority for a single, 24-year-old, as they are less likely to have dependents. Health, disability, and auto insurance are more critical for immediate needs and financial protection.

Front

The federal agency that oversees insurance companies is

Back

Insurance companies are regulated on a state-by-state basis

Answer explanation

Insurance companies are primarily regulated at the state level, meaning each state has its own laws and regulations governing insurance practices, rather than a single federal agency overseeing them.

Front

What role does insurance play in financial planning?

Back

It guarantees that income and assets are protected.

Answer explanation

Insurance plays a crucial role in financial planning by guaranteeing that income and assets are protected against unforeseen events, ensuring financial stability and security.

Front

The out of pocket cost to the insured is called...

Back

Deductible

Answer explanation

The out-of-pocket cost to the insured is called a deductible. This is the amount the insured must pay before the insurance company starts to cover costs, unlike a premium, which is the regular payment for the insurance policy.

Front

Who analyzes statistics to calculate risks and premiums?

Back

Actuary

Answer explanation

An actuary analyzes statistics to assess risks and determine appropriate premiums for insurance policies, making them the correct choice for this question.

Front

Which coverage would cover a stone hitting your windshield?

Back

Comprehensive

Answer explanation

Comprehensive coverage protects against non-collision incidents, such as a stone hitting your windshield. Collision coverage applies to accidents involving other vehicles, while liability covers damage to others.

Front

Each of these factors impacts your insurance premium EXCEPT...
Your income, Your credit score

Back

Your income

Answer explanation

Your income does not directly affect your insurance premium, while factors like deductible amount, vehicle type, and credit score do influence the cost of your insurance.

Front

Which of the following wouldn't save you money on auto insurance?
Reduce or eliminate optional insurance on an older vehicle
Decrease your deductible

Back

Decrease your deductible

Answer explanation

Decreasing your deductible actually increases your premium, as you are agreeing to pay less out-of-pocket in case of a claim. The other options can lead to savings on your auto insurance.

Front

The $10,000 in Jennifer's auto policy covers

Back

Property damage per occurrence

Answer explanation

The $10,000 in Jennifer's auto policy specifically covers property damage per occurrence, meaning it applies to damages caused in a single incident, rather than per person or as a total coverage limit.

Front

A policy is a contract between the

Back

Consumer and the insurance company

Answer explanation

A policy is a contract between the consumer and the insurance company, outlining the terms of coverage and obligations. The other options do not accurately represent the contractual relationship involved in insurance.