Unit 5: Risk Management

What role does insurance play in financial planning?

• It guarantees that income and assets are protected

• It helps build and maintain one's credit score

• It helps cover day-to-day expenses

• It grows in value and appreciates over time

The out of pocket cost to the insured when a loss occurs is called...

• Premium

• Deductible

A stone hits your windshield. Which type of coverage would likely cover this expense?

• Collision

• Liability

• Comprehensive

• None

Which of the following wouldn't save you money on your auto insurance premium?

• Decrease your deductible

• Reduce or eliminate optional insurance on an older vehicle

• Maintain a good credit history

• Bundle your insurance with other policies

A policy is a contract between the

• Policyholder and the injured person

• Driver and the government

• Consumer and the insurance company

• Consumer and the insurance agent

Under current law, until what age can a child stay on their parents' health insurance?

• 18

• 21

• 26

• 29

Your health insurance copay is

• Amount paid out of pocket before your insurance coverage

• Paid by the insurer

• Applied on an annual basis

• A fixed amount of money you pay each time you use your plan

How can you obtain health insurance?

• From an insurance agent or through the Health Insurance Marketplace

• Through your bank or credit union

• Signing up at your family doctor's office

• Remaining on your parents' plan if you are under age 30

Which of the following would be covered under a renter's insurance policy?

• Damage to the exterior of the property

• Medical bills of another person who is injured on the property

• Your friend's personal belongings in the rental unit

• Damage to a detached shed on the property

True or False: Insurance is based on the concept of shared risk, or risk pooling.

• True

• False