Insurance Basics Quiz

What is the purpose of life insurance?

• To reimburse for automobile damage

• To provide income during disability

• To pay a specified sum to beneficiaries upon the death of the insured

• To cover legal liabilities

Which insurance covers a policyholder's legal liability from injuries to other persons?

• Life Insurance

• Collision Insurance

• Liability Insurance

• Health Insurance

What is the main purpose of health insurance?

• To cover automobile damage

• To provide income during disability

• To pay for medical expenses or treatments

• To cover home repairs

Who is a broker in the context of insurance?

• A person who sells insurance

• A person who buys insurance

• A licensed person paid to look for insurance on your behalf

• A person who processes claims

What is the purpose of liability insurance in terms of property damage?

• To cover medical expenses

• To cover property damage to a third party

• To increase property value

• To insure against natural disasters

What does liability insurance cover in terms of bodily injury?

• Emotional distress

• Bodily injury to a third party

• Loss of income

• Property theft

How is the actual cash value for vehicles determined?

• By the vehicle's age

• By local area private party sales and dealer quotations

• By the manufacturer's suggested retail price

• By the owner's estimate

What does 'Cancellation' refer to in insurance terms?

• Increasing the coverage amount

• Termination of insurance coverage during the policy period

• Adding a new beneficiary

• Changing the policy type

Which of the following is NOT covered by liability insurance?

• Property damage to a third party

• Bodily injury to a third party

• Personal property theft

• Negligent acts of an insured

What is the purpose of liability insurance for bodily injury?

• To cover emotional distress

• To cover bodily injury to a third party

• To cover property damage

• To cover legal fees