Insurance 2025

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

Answer explanation

Insurance plays a crucial role in financial planning by guaranteeing that income and assets are protected against unforeseen events, ensuring financial stability and security.

Match the correct insurance answers!

• The amount you pay for your health insurance every month.

• Deductible

• is a flat fee that you pay on the spot each time you go to your doctor or fill a prescription.

• Co-Pay

• The amount you pay for covered health care services before your insurance plan starts to pay.

• Premium

Match the correct answers for these auto insurance questions / answers.

• cover the costs of the other driver's property and bodily injuries if you're found at fault

• Comprehensive

• protects against damage to your vehicle caused by non-collision events

• Liability

• covers you in an accident with another vehicle or object if your car needs to be repaired

• Deductible

• $ you're responsible for paying when you have a covered comprehensive or collision loss

• Collision

What factors impact the cost of your auto insurance premium? (choose 4 correct answers)

• Deductible amount

• The vehicle you are insuring

• Your credit score

• Your income

• 1. How many miles you drive per year

Answer explanation

The cost of auto insurance is influenced by the deductible amount, the vehicle being insured, your credit score, and how many miles you drive per year. These factors help insurers assess risk and determine premiums.

Carlos’s auto insurance policy includes limits of $20,000 per person for bodily injury, $40,000 total for all injuries per accident, and $10,000 for property damage. What does the $10,000 cover?

• Per person bodily injury

• Property damage per occurrence

• Per occurrence bodily injury limit

• Total amount of insured coverage

Answer explanation

The $10,000 limit specifically covers property damage per occurrence, meaning it is the maximum amount the policy will pay for damage to someone else's property in a single accident.

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

Answer explanation

A policy is a contract between the consumer and the insurance company, outlining the terms of coverage and obligations. The other options do not accurately represent the contractual relationship involved.

Until what age can a child stay on their parents' health insurance?

• 18

• 21

• 26

• 29

Answer explanation

Under the Affordable Care Act, children can remain on their parents' health insurance until they turn 26. This applies regardless of their marital status or financial independence, making 26 the correct answer.

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

Answer explanation

A copay is a fixed amount you pay each time you use your health insurance plan, such as for a doctor's visit or prescription. This distinguishes it from other costs like deductibles or premiums.

How can you obtain health insurance? (choose 3 correct answers)

• Buying from an insurance agent

• Shopping on HealthCare.gov

• Signing up at your doctor's office

• Through your employer

• Calling your congressperson

Answer explanation

You can obtain health insurance by buying from an insurance agent, shopping on HealthCare.gov, or through your employer. Signing up at your doctor's office and calling your congressperson are not valid methods.

23. A standard renters insurance policy would cover each of the following EXCEPT…

• 1. A week of hotel reservations when the tenant has to move out due to fire damage

• 1. A lawsuit brought when a visitor hits their head on a low hanging light fixture

• 1. A new window when a baseball breaks the original one

• 1. A small TV and some sneakers, stolen in a robbery

• Money to replace your xBox 3 if your apartment has a fire

Answer explanation

A standard renters insurance policy typically covers personal property and liability, but it does not cover damage to the building itself, such as a new window broken by a baseball.