Unit 6: Insurance Test

What is the primary purpose of insurance?

• To increase taxes

• To reduce personal income

• To act as a financial safety net

• To limit job opportunities

Which of the following is NOT a key insurance term?

• Premium

• Deductible

• Refund

• Co-Pay

A fixed amount paid for specific services under a health plan is a:

• Policy limit

• Deductible

• Premium

• Co-Pay

Which type of risk is generally insurable?

• A. Business risks

• B. Speculative risks

• C. Pure risks

• D. Investment risks

Which type of insurance pays out to beneficiaries upon the policyholder’s death?

• Disability

• Life

• Auto

• Health

What is the purpose of setting goals when selecting an insurance plan?

• To increase premiums

• To evaluate competitors

• To reflect personal needs

• To avoid paying deductibles

Which of the following is important when choosing an insurance company?

• Color of logo

• Licensing in your state

• Number of clients

• Employee dress code

Which type of auto insurance covers damages to your car in a collision regardless of fault?

• Liability

• Comprehensive

• Collision

• Medical payments

What does uninsured motorist protection cover?

• Vehicle breakdowns

• Roadside assistance

• Accidents with uninsured drivers

• Traffic tickets

What is one way to lower auto insurance premiums?

• Driving more miles

• Decreasing deductibles

• Installing security devices

• Ignoring parking tickets