Insurance and Risk Management Quiz Review

Insurance and Risk Management

Review for Quiz

Multiple Choice

Insurance can help you manage ___________

• Risk

• Financial loss due to risk

• Both of the above

• Neither of the above

Multiple Choice

Financial risks can be caused by _______.

• Accidents

• Lawsuits

• Disability

• Any of the above

Multiple Choice

Which of the following is true?

• In managing risk, you should buy the most insurance you can afford.

• When comparing insurance, you should always buy the policy with the lowest premium.

• Both are true

• Neither is true

Multiple Choice

There are many ways to manage risks in your financial life. For example, not taking any steps at all to reduce the risk of financial loss is called _______.

• Assuming risk

• Avoiding Risk

• Sharing Risk

• Transferring Risk

Multiple Choice

If you injure yourself at work and become unable to perform your duties, what form of insurance is designed to pay you benefits for a certain length of time?

• Work insurance

• Life insurance

• Disability insurance

• Health insurance

Multiple Choice

The more risk you transfer to an insurance company, the _______ your premiums will be.

• Lower

• Higher

Multiple Choice

Anything _______ that has an adverse effect on your financial goals is financial risk.

• Expected

• Unexpected

• Expected or unexpected

Multiple Choice

If you live in an apartment, what form of insurance would cover your belongings?

• Homeowner's insurance

• Renter's insurance

• Life Insurance

• Health Insurance

Multiple Choice

Which of the following is a way to manage risk?

• Assume risk

• Avoid Risk

• Share Risk

• All of the above

Multiple Choice

Before buying an insurance policy, you should determine _______.

• How much coverage you should buy

• How much you want to spend on premiums

• How much of the risk you can assume yourself

Multiple Choice

An insurance deductible amount is an example of _______.

• Assuming risk

• Avoiding risk

• Sharing risk

• Transferring risk

Multiple Select

The best way to shop for insurance is to buy a policy with the lowest premium.

• True

• False

Multiple Select

Liability insurance would cover a situation where another person sued you.

• True

• False

Multiple Choice

Insurance is used to manage what?

• Wealth

• Accidents

• Financial risk

• All risks

Multiple Select

The best way to shop for insurance is to buy a policy with the lowest premium.

• True

• False

Multiple Choice

Premiums for insurance are based partly upon the likelihood of a negative event occurring.

• True

• False

Multiple Choice

What form of insurance would pay for the costs of assisted living?

• Disability insurance

• Long-term care insurance

• Homeowner's insurance

• Health insurance

Multiple Choice

Which of the following is false?

• An insurance policy is a legal contract.

• In risk management, you should only buy insurance to cover amounts "at risk."

• You can save money by buying only benefits and riders you need.

• You should always insure property against loss.

Multiple Choice

You should only insure property for losses you cannot afford.

• True

• False

Multiple Select

It is possible to determine the mathematical probability of risk occurring and the financial risk at stake.

• True

• False

Multiple Select

It is possible to eliminate all risk in personal finance.

• True

• False