Unit 3: CFA 4 (Standard 7)

Which of the following is the primary purpose of insurance?

• To increase your income

• To protect against financial loss

• To avoid paying taxes

• To guarantee investment returns

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GA.SS.12.SSEPF7

What is a deductible in an insurance policy?

• The amount the insurer pays for a claim

• The amount the policyholder pays out-of-pocket before insurance covers the rest

• The total value of the policy

• The interest earned on the policy

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GA.SS.12.SSEPF7

Which type of insurance is specifically designed to cover medical expenses?

• Auto insurance

• Health insurance

• Homeowners insurance

• Life insurance

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GA.SS.12.SSEPF7

What does a premium refer to in the context of insurance?

• The total amount paid out in claims

• The regular payment made to keep an insurance policy active

• The value of the insured item

• The amount paid after a claim is approved

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GA.SS.12.SSEPF7

Which of the following is an example of risk management?

• Ignoring potential hazards

• Purchasing insurance for your car

• Spending all your savings

• Not wearing a seatbelt

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GA.SS.12.SSEPF7

Which insurance type would most likely cover damage to your home from a fire?

• Life insurance

• Homeowners insurance

• Health insurance

• Auto insurance

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GA.SS.12.SSEPF7

If you want to protect your family financially in the event of your death, which type of insurance should you consider?

• Life insurance

• Auto insurance

• Health insurance

• Renters insurance

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GA.SS.12.SSEPF7

Which of the following best describes liability insurance?

• Insurance that pays for your own injuries

• Insurance that covers damages you cause to others

• Insurance that covers theft of your property

• Insurance that pays for routine maintenance

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GA.SS.12.SSEPF7

If your car is damaged in an accident and you have collision coverage, what will your insurance most likely do?

• Pay for the repairs to your car after you pay the deductible

• Pay for your medical bills only

• Pay for the other driver’s car repairs

• Pay for your car’s routine maintenance

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GA.SS.12.SSEPF7

A person decides to install a security system in their home. Which risk management strategy are they using?

• Risk avoidance

• Risk reduction

• Risk transfer

• Risk retention

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GA.SS.12.SSEPF7