Insurance

Front

Which type of insurance is likely to be the lowest priority for a single, working, 24-year-old? Options: Health insurance, Disability insurance, Life insurance, Auto insurance

Back

Life insurance

Answer explanation

Life insurance is typically a lower priority for a single, working 24-year-old, as they may not have dependents relying on their income. In contrast, health, disability, and auto insurance are more immediately relevant.

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 when a loss occurs is called...

Back

Deductible

Answer explanation

The out of pocket cost to the insured when a loss occurs is called a deductible. This is the amount the insured must pay before the insurance coverage kicks in, distinguishing it from the premium, which is the cost of the insurance itself.

Front

This professional analyzes statistics and uses them to calculate risks and premiums.

Back

Actuary

Answer explanation

An actuary specializes in analyzing statistics to assess risks and determine insurance premiums, making them the correct choice. Agents sell insurance, claims clerks process claims, and underwriters evaluate risks but do not focus solely on statistics.

Front

A stone hits your windshield. Which type of coverage would likely cover this expense?

Back

Comprehensive

Answer explanation

Comprehensive coverage typically covers damage to your vehicle from non-collision incidents, such as a stone hitting your windshield. Collision coverage applies to accidents with other vehicles, while liability covers damages to others.

Front

Each of these factors impacts your insurance premium EXCEPT... Deductible amount, The vehicle you are insuring, Your credit score, Your income

Back

Your income

Answer explanation

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

Front

Which of the following wouldn't save you money on your auto insurance premium?
- Decrease your deductible
- Reduce or eliminate optional insurance on an older vehicle
- Maintain a good credit history
- Bundle your insurance with other policies

Back

Decrease your deductible

Answer explanation

Decreasing your deductible actually increases your auto insurance premium, as you are agreeing to pay less out of pocket in the event of a claim. The other options can help lower your premium.

Front

Jennifer has an auto policy of $20,000/$40,000/$10,000. The $10,000 covers

Back

Property damage per occurrence

Answer explanation

The $10,000 in Jennifer's auto policy refers to property damage per occurrence, which covers damages to another person's property in an accident. The other limits pertain to bodily injury coverage.

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.