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Insurance Test

Total questions: 51

Worksheet time: 46mins

Name
Class
Date
1.

What role does insurance play in financial planning?

a)

It guarantees that income and assets are protected

b)

It helps build and maintain one's credit score

c)

It helps cover day-to-day expenses

d)

It grows in value and appreciates over time

2.

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

a)

Collision

b)

Liability

c)

Comprehensive

d)

None

3.

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

a)

Decrease your deductible

b)

Reduce or eliminate optional insurance on an older vehicle

c)

Maintain a good credit history

d)

Bundle your insurance with other policies

4.

Your health insurance copay is

a)

Amount paid out of pocket before your insurance coverage

b)

Paid by the insurer

c)

Applied on an annual basis

d)

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

5.

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

a)

True

b)

False

6.
Someone who receives money if an insured person dies
a)
claim
b)
beneficiary
c)
dependent
d)
employee benefits
7.
An unexpected death of a family member occurs and results in funeral expenses
a)
Long-term care Insurance
b)
Disability Insurance
c)
Life Insurance
d)
Liability Insurance
8.
Your house is destroyed by a tornado and you need to rebuild it.
a)
Homeowners Insurance
b)
Renters Insurance
c)
Life Insurance
d)
Liability Insurance
9.

You hit a deer with your car and it needs to be repaired

a)

Liability Insurance

b)

Comprehensive Insurance

c)

Collision Insurance

d)

Life Insurance

10.
Food poisoning sends you and your family to the emergency room.
a)
Liability Insurance
b)
Disability Insurance
c)
Life Insurance
d)
Health Insurance
11.
After your knee surgery, you are unable to work for 3 months and you need help paying expenses while you're out of work
a)
Disability Insurance
b)
Health Insurance
c)
Life Insurance
d)
Automobile Insurance
12.
Someone breaks into your apartment and steals your iPad.
a)
Homeowners Insurance
b)
Liability Insurance
c)
Comprehensive Insurance
d)
Renters Insurance
13.
You crash your car into another vehicle and hurt someone else in the car
a)
Bodily Injury Liability
b)
Property Damage Liability
c)
Collision Insurance
d)
Comprehensive Insurance
14.
Which type of Life Insurance policy only pays a beneficiary when a person dies during a time period?
a)
Term Life Insurance
b)
Whole Life Insurance
c)
Variable Life Insurance
d)
Universal Life Insurance
15.
What type of insurance coverage is considered specialized?
a)
Floods and earthquakes
b)
Stolen or destroyed property
c)
Loss of Use
d)
Property Damage from a fire
16.

Which of the following is a way to lower your insurance premium?

a)

have a good driving record

b)

be involved in sports

c)

have a parent with you at all times

d)

buy a sports car

17.

Who needs auto insurance?

a)

Nobody

b)

People that think they will get into an accident.

c)

All people who drive cars.

d)

People who can afford it.

18.

_______ _________ insurance also known as permanent life insurance, offers financial protection for your entire life

a)

term life

b)

whole life

c)

universal life

d)

life

19.

The higher the deductible the lower the premium

a)

True

b)

False

20.
The two types of life insurance categories are
a)
Whole and Term
b)
Whole and Variable
c)
Term and Variable
d)
Term and Fixed
21.

Why is it important to have insurance?

a)

To protect others from your mistakes

b)

To protect your assets from claims by others

c)

Guard against financial loss that can not be predicted

d)

All of the above

22.

Which term is given to the formal request made to an insurance company for compensation for a covered loss

a)

Filing a claim

b)

Filing a benefit

c)

Filing a Co-Payment

d)

Filing a deductible

23.

How does premium impact deductible?

a)

The higher the premium the higher the deductible

b)

The lower the premium the higher the deductible

c)

The lower the premium the lower the deductible

d)

There is no correlation between premium & deductible

24.

Who pays a deductible?

a)

The insurance provider

b)

The company you work for

c)

The person who has the insurance policy

25.

How much risk or liability is protected with an insurance policy?

a)

policy

b)

deductible

c)

coverage

d)

premium

26.

An optional addition to an insurance policy that adds benefits or amends the terms of the policy and may increase the premium.

a)

rider

b)

collateral

c)

payday loan

d)

optional coverage

27.

Your dad was leaving a restaurant when he backed into a Ferrari. Only the automobiles were damaged; there were no physical injuries. What coverage pays for the Ferrari?

a)

Property Damage Liability

b)

Comprehensive

c)

Collision

d)

All of these

28.

Which is the correct type of insurance that would be used: David’s mother is killed in an automobile accident. What type of insurance would provide his family financial support to cover the paid and unpaid work his mother performed?

a)

Property and liability

b)

Health

c)

Life

d)

Disability

e)

Workers’ compensation

29.

Which is the correct type of insurance that would be used: Sally is not feeling well so her mother takes her to the doctor. The doctor tells her she has strep throat, gives her medication, and sends her home to recover. What type of insurance would be used in this case?

a)

Property and liability

b)

Health

c)

Life

d)

Disability

e)

Workers’ compensation

30.

Which is the correct type of insurance that would be used: Joey’s father is in a car accident and cannot work. What type of insurance replaces his father’s earnings?

a)

Property and liability

b)

Health

c)

Life

d)

Disability

e)

Workers’ compensation

31.
A person buys a flat screen, plasma, theater-like television. The person has homeowner?s insurance. Why would it be appropriate to add a personal property floater to that insurance?
a)
To reduce the premium on the homeowner?s insurance.
b)
To protect the person who owns the television from liability for damages.
c)
To show the insurance company a good faith investment has been made.
d)
To cover the cost of replacement should the television get damaged or stolen.
32.
A woman has just received a very expensive piece of jewelry. The woman has homeowner's insurance. Which statement would it be most appropriate for her to make to her insurance agent?
a)
"I think I need a personal property floater."
b)
"I think I should get speculative risk insurance."
c)
"I will deduct the cost of the jewelry from my premium."
d)
"I realize that if this jewelry is stolen it will be considered vicarious liability."
33.
For the past five years, a person has had a $20,000 whole life insurance policy that has a cash value clause. The person decides to surrender the policy. At the time of surrender, the person will receive
a)
one-fifth of the $20,000 face value.
b)
$20,000 less the premiums paid.
c)
a calculated amount of money which includes the premiums paid as well as the interest on that money.
d)
a calculated amount of money that must be converted to a term life insurance policy.
34.
You have a $2,000 loss. Your insurance company pays you $1,500 on the claim for the loss. The $500 the insurance did not pay is a result of your policy having a:
a)
Co-insurance clause
b)
Deductible
c)
Hazard clause
d)
Premium
35.
Why is term life insurance usually the least expensive type of life insurance?
a)
The policy only pays a death benefit
b)
The policy builds a cash value
c)
The policy provides coverage for a lifetime
d)
The policy is available to all consumers
36.
Lucy has no insurance. The situation(s) should she consider insuring against first are:
a)
Death so her financial obligations are paid
b)
Losses resulting from an illness, accident, or disability
c)
Property losses and auto accidents
d)
Auto collision, and burglary
37.
Which of the following insurance covers vehicles?
a)
Mortgage
b)
Racing
c)
Automobile
d)
Life
38.
Insurance is frequently described as a method of "sharing the risk" because the:
a)
Risk of loss is shared with the insurance company sales person
b)
Insured shares the risk of loss with all the other policy holders
c)
Insured can share the risk by spreading the cost over a number of years
d)
Risk of loss is shared with the government
39.
Sally took out a $50,000 life insurance policy. The $50,000 amount of coverage is called the:
a)
Cash value
b)
Premium value
c)
Death benefit or face value
d)
Annuity value
40.
Richard's auto insurance policy expired on 5/15/2002. Richard was upset with his insurance agent and decided to change insurance companies. At 10:00 a.m. on 5/16/2002, as he drove to a different agent to buy a new policy, he had an accident. Who is liable for damage to his car and his personal injuries?
a)
The old agent
b)
The new agent
c)
Richard
d)
The old agent is liable for damage to your car and the new agent for personal injuries
41.
A person buys a homeowner�s insurance policy with a $250 deductible, which means the person will
a)
have to pay a quarterly premium of $250.
b)
have to pay the first $250 which will be deducted from the claim settlement paid by the insurance company.
c)
only receive payment from the insurance company of $250 for any single article damaged.
d)
not be responsible for the first $250 of the claimed damages.
42.

Which of the following would likely be covered under homeowners insurance but NOT by renter's insurance?

a)

a. Your basement floods, causing you to lose a valuable collection.

b)

b. A burglar makes off with your laptop while you're out of town.

c)

c. A tree branch breaks your bedroom window during a storm.

d)

d. A fire destroys almost all your possessions.

43.

Jan pays $70 each month for her auto insurance policy. This regular payment is called a:

a)

a. co-pay

b)

b. deductible

c)

c. premium

d)

d. claim

44.

In which of the following scenarios will you be entitled to pay the least amount of money out-of-pocket for a medical expense?

a)

a. You have no insurance.

b)

b. You have health insurance with a $500 deductible.

c)

c. You have auto insurance with a $700 deductible.

d)

d. You have health insurance with a $1,500 deductible.

45.

Your auto insurance policy has a $200 monthly premium and $700 deductible. What is the maximum amount you will have to pay out-of-pocket for a car accident before your insurance covers your costs?

a)

$200

b)

$500

c)

$700

d)

$900

46.

You have an insurance policy with a $300 premium and a $500 deductible. How much should you expect to pay the insurance company each month for coverage?

a)

$200

b)

$300

c)

$500

d)

$800

47.

Which of the following typically have the highest auto insurance premiums?

a)

a. Young, inexperienced drivers

b)

b. Older, experienced drivers

c)

c. Drivers who have safe driving records

d)

d. Drivers who travel short distances

48.

Wearing a seat belt, not texting when driving, and driving carefully are all examples of...

a)

insurance policies.

b)

warranties.

c)

risk management strategies.

d)

deductibles.

49.

Which of the following is NOT an examples of a risk management strategy?

a)

Wearing reflective clothing while bike riding at night

b)

Buying a new car

c)

Wearing a helmet while biking

d)

Wearing a seat belt while driving

50.

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

a)

18

b)

21

c)

26

d)

29

51.
Someone who relies on someone else for income and care
a)
beneficiary
b)
claim
c)
deductible
d)
dependent

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