WorksheetsInsurance Basics Review
Total questions: 20
Worksheet time: 33mins
Explain the purpose of any insurance policy.
To provide financial protection against unforeseen events
To increase the value of personal assets
To ensure a guaranteed profit for the insurance company
To avoid paying taxes on income
What is risk pooling?
A method where insurance companies invest in stocks to reduce risks
A process where premiums from many people are used to cover the costs of emergencies for a few
A strategy to increase the number of clients for insurance companies
A way to calculate the probability of accidents
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
Why would someone want to have renters insurance if their building owner has insurance?
The building owner’s insurance only covers liability. Renters insurance will cover damage to the exterior and structure of the building.
The building owner’s insurance only covers the building structure. Renters insurance covers your personal property.
There is no need to get renters insurance if the building owner already has an insurance policy
By law, you must have two types of insurance: landlord insurance and renters insurance
The coverage under renters insurance will cover the costs of the following items EXCEPT:
Your personal belongings
The damage to the building
Hotel you have to stay at until your apartment can be repaired
Small alterations to the property you made at your own expense
What is the purpose of liability coverage on a renters insurance policy?
It covers only damage to the exterior of the rental unit
It covers your medical bills if you are injured on the property
It covers unintended damage and accidents in the rental
Liability coverage is not available on a renters insurance policy, only on a landlord policy
There is no need for a college student to have a renters insurance policy.
TRUE
FALSE
What is a premium?
The amount you pay to buy an insurance policy
A specified amount of money that the insured must pay before an insurance company will pay a claim
An arrangement by which a company provides a guarantee of compensation for a specified loss
Measures that are taken for disease prevention
Who typically pays for health care expenses once you have met your deductible?
You pay for all health care expenses
Your insurance pays for all health care expenses
You and your insurance company share the cost of health care expenses
No one pays; once you meet your deductible, your health care expenses are free
Which answer uses the terms premium, deductible, and out-of-pocket maximum correctly?
You pay a monthly premium for your health insurance. You pay for health services until you meet your deductible. Once you meet your out-of-pocket maximum, your insurance pays the rest of your health care costs for that year.
You pay a monthly deductible for your health insurance. You and your health insurance company share health care costs by paying separate premium costs. Once you meet your out-of-pocket maximum, your insurance company pays your health care costs except for your copays.
You pay a monthly premium for your health insurance. Your insurance will cover a specific percentage of your health insurance costs up to an out-of-pocket maximum. Once you have reached your maximum limit, your only out-of-pocket expense is your deductible.
You pay a monthly deductible for your health insurance. When you use your health insurance, you will pay your premium out-of-pocket. Once you meet your out-of-pocket maximum for the year, your insurance will pay the remaining amount of your health care costs.
Which of the following lists includes three common risks people take during an average day?
Driving, eating unhealthy food, and skipping exercise.
Watching TV, reading books, and sleeping.
Taking vitamins, drinking water, and walking.
Playing sports, studying, and cleaning your room.
What are the potential consequences of these risks?
Improved health and better productivity.
Financial loss, injury, or illness.
Increased savings and reduced stress.
Better relationships and more free time.
How do you decide if you even need life insurance?
By considering your financial responsibilities and dependents.
By checking your favorite TV shows.
By asking your friends about their hobbies.
By choosing the cheapest option available.
What factors impact the cost of your life insurance premium?
Your age, health, and lifestyle choices.
The number of books you read per year.
The amount of time you spend on social media.
The number of pets you own.
A stone hits your windshield. Which type of coverage would likely cover this expense?
Collision
Liability
Comprehensive
None
Your sweet Camaro had its windows busted by a hoodlum. It is unfortunate. Luckily you bought _________ coverage auto insurance.
Collision
Comprehensive
No fault
Liability
Life insurance policy for a specific period of time is called:
Joey's father is in a car accident and cannot work. What type of insurance replaces his father's earnings?
Health
Life
Disability
Property and Liability
