WorksheetsIntro to Insurance
Total questions: 7
Worksheet time: 5mins
The purpose of insurance is to…
build wealth
transfer risk
manage assets
build relationships
Why is it important for insurance companies to have a large risk pool of people paying premiums?
If a large pool of people pay premiums, insurance company employees will get more bonuses included in their next paycheck
The premium payments of all the insured clients will cover the costs for the emergencies of the few who need it
The more people that pay premiums, the more careful each insured client becomes with their lifestyle choices
A large pool of people paying premiums allows insurance companies to have a larger social media following
What role does math play in the insurance industry?
Insurance companies use statistics to find how likely a client will need to use the insurance so they can set premiums in order to have the highest chance of making a profit
Insurance companies use algebra and geometry to calculate the distance from clients' major emergencies to nearest hospitals
Insurance companies use statistics to hypothesize how likely clients are to switch over to competitive companies
Insurance companies use calculus to find out how likely a client will need to use the insurance so they can set premiums in order to have the highest chance of making a profit
Jerry has an insurance policy with a premium of $150 per month. In June, he causes an accident and receives a bill with a total cost of $6000. His deductible is $1500, and his coverage limit is $10,000.
How much money will Jerry have to pay for the accident's bill?
(a)
Jerry has an insurance policy with a premium of $150 per month. In June, he causes an accident and receives a bill with a total cost of $6000. His deductible is $1500, and his coverage limit is $10,000.
How much total money will Jerry have to pay in the month of June?
(a)
If a coverage limit is high, the premium will be...
high
low
the same
After the accident, Jerry starts thinking, “Wow, that $1500 deductible is a lot to pay for all at once! Who knows when I’ll get in another accident, but I sure wish my deductible were lower!” He asks his auto insurance agent, who shows him this chart:
Jerry's auto insurance agent is trying to tell him if the deductible is low, the premium will be...
high
low
the same
