Understanding Insurance and Pensions

Which of the following best describes a 'premium' in the context of insurance?

• The amount paid out by the insurer when a claim is made

• The regular payment made by the insured to the insurer for coverage

• The value of the insured item

• The profit made by the insurance company

Who is the 'insured' in an insurance contract?

• The person or entity providing the insurance

• The person or entity receiving the insurance coverage

• The government regulator

• The insurance broker

What is a 'defined contribution' pension scheme?

• A pension where the payout is guaranteed by the employer

• A pension where the amount paid in is fixed, but the final benefit depends on investment performance

• A pension provided only by the state

• A pension with no contributions required

Which of the following is a feature of a 'defined benefit' pension scheme?

• The final pension depends on investment returns

• The final pension is based on salary and years of service

• The employee chooses how much to contribute

• The pension is only available to self-employed people

What is the main difference between a state pension and a private pension in the UK?

• State pensions are only for people who work in the public sector

• Private pensions are provided by the government

• State pensions are provided by the government, private pensions are arranged by individuals or employers

• Private pensions are only available to people over 70

In insurance, who is the 'insurer'?

• The person who receives the insurance payout

• The company or person who provides the insurance policy

• The government regulator

• The person who sells the policy

Which of the following is an example of a 'bonus' in the context of employment?

• A regular monthly salary

• An extra payment given for good performance

• A deduction from pay for lateness

• A pension contribution

Which of the following best defines 'expenditure'?

• Money received from selling goods

• Money spent on goods and services

• Money saved in a bank account

• Money borrowed from a friend

Which of the following is considered a 'need' rather than a 'want'?

• Designer trainers

• A smartphone upgrade

• Food and water

• Concert tickets

Which of the following is a 'want' rather than a 'need'?

• Rent for accommodation

• Prescription medication

• A holiday abroad

• School uniform