WISE Review: Insurance

What is the primary role of an insurance company?

• To provide loans to individuals

• To offer investment advice

• To act as a financial institution that provides protection against risk

• To manage real estate properties

Maya and her friends are considering joining a group insurance plan. How can sharing risk with other policyholders in this plan affect the cost of their insurance coverage?

• It increases the cost of coverage

• It reduces the cost of coverage

• It has no effect on the cost of coverage

• It doubles the cost of coverage

Ethan is trying to understand what factors affect the cost of his automobile insurance premiums. Which factor does NOT affect the cost?

• Age

• Gender

• Favorite color

• Marital status

What is one strategy to reduce the cost of car insurance?

• Decrease the deductible

• Increase the deductible

• Buy a more expensive car

• Drive more frequently

Emma was driving her car when she got into an accident. What is the consequence of not having auto insurance?

• Lower repair costs

• No financial protection in case of an accident

• Increased driving privileges

• Reduced vehicle maintenance

Rohan is looking for ways to reduce his car insurance expenses. What is one way he could potentially lower his costs?

• Cancel collision insurance

• Increase the deductible

• Submit small claims frequently

• Avoid taking a driver education course

Hannah just started a new job and is reviewing her benefits package. What is a common practice for employers regarding health insurance payments?

• Employers pay the full amount

• Employees pay the full amount

• Employers pay a percentage, and the rest is deducted from the employee's pay

• Health insurance is not provided by employers

What is the difference between term life and whole life insurance?

• Term life is more expensive than whole life

• Whole life has a fixed period of coverage

• Term life is for a specific period, while whole life covers the entire life

• Whole life is only for young adults

Arjun and Grace are both in excellent health and do not smoke. What is a benefit they might experience as consumers?

• Higher insurance premiums

• Lower insurance costs

• No insurance coverage

• Increased co-pays

What is the purpose of replacement value feature in property insurance?

• It reduces the premium cost.

• It provides liability coverage.

• It pays the claim based on current replacement cost.

• It covers only the deductible.