Life Insurance

Which of the following best describes a life insurance policy?

• A contract with an insurance company

• A type of savings account

• A government grant

• A credit card

Which of the following is NOT a function of life insurance?

• Providing a lumpsum payment upon death

• Transferring financial risk

• Paying for daily expenses

• Protecting beneficiaries financially

What is the role of the policyholder in a life insurance agreement?

• To pay premiums

• To receive the death benefit

• To manage the insurance company

• To set the premium rates

Which of the following actions is required to keep a life insurance policy active?

• Paying premiums regularly

• Visiting the insurance office daily

• Changing beneficiaries monthly

• Investing in stocks

What is the significance of occupation in life insurance risk assessment?

• Some occupations are riskier and may increase premiums

• All occupations are treated the same

• Occupation is not considered

• Only office jobs are considered

What is the primary purpose of an insurance policy?

• To help pay for the income lost in the event of your death

• To increase your monthly income

• To avoid paying taxes

• To provide investment advice

How can insurance help manage financial risk?

• By transferring risk to an insurance company

• By increasing your salary

• By reducing your expenses

• By eliminating all risks

What is one way to avoid risk according to the text?

• By not participating in an activity

• By investing in stocks

• By buying more insurance

• By increasing your spending

What does paying a monthly fee to an insurance company represent?

• Transferring risk

• Avoiding risk

• Increasing risk

• Ignoring risk

What is the result of paying a monthly fee to an insurance company?

• The risk is transferred to the insurance company

• You avoid all risks

• You increase your risk

• You receive a loan