The Role of Insurance in Financial Planning

What is the primary purpose of insurance?

• To manage and offset financial losses

• To increase financial risk

• To provide peace of mind

• To avoid paying taxes

Which of the following is a benefit of having health insurance?

• Access to preventative care

• Increased emergency room visits

• Higher insurance premiums

• Higher medical bills

What is a deductible in an insurance policy?

• The amount the insured pays before the insurer pays a claim

• The amount the insurer pays before a claim

• A type of insurance premium

• A discount on the insurance policy

Why might someone be considered overinsured?

• They have the exact amount of insurance needed

• They have more insurance than needed for their assets

• They pay lower premiums than necessary

• They have too little insurance coverage

What type of insurance covers the repair or rebuilding of a house?

• Auto insurance

• Health insurance

• Property insurance

• Life insurance

Which type of insurance is important for protecting income if unable to work due to illness?

• Property insurance

• Life insurance

• Disability insurance

• Auto insurance

What is the role of life insurance in financial planning for individuals with children?

• To pay for home repairs

• To insure against car accidents

• To cover medical expenses

• To provide a death benefit for income support

What is a common cause of bankruptcy in the United States?

• Life insurance premiums

• Property insurance costs

• Medical bills

• High auto insurance premiums